2011, another year of reorganization of the glass industry

At present, the National Twelfth Five-Year Plan is being drafted. Looking at the “Twelfth Five-Year Plan” for building materials, there are three main concerns: Traditional industries will be subject to mergers and acquisitions, and industry concentration will be further enhanced; the building materials industry will be supplied by simple raw materials. Excessive production of components, deep processing of building materials (concrete, special glass, gypsum board, etc.) will be faster development; "low-carbon" economic new building materials will be full of opportunities; In addition to the development of strategic emerging industries, the process of industrial upgrading to high-end The support of mechanical equipment will lead to the rapid industrialization of high-performance fiber composite materials. The flat glass industrial chain will be further extended. The glass industry will develop high-quality, green, multi-functional, high-value-added, high-tech processing products. The original glass products will be transformed from the final consumer goods to the intermediate products. The demand for high-tech special glass such as TCO conductive glass and high-generation flat panel display substrate glass will continue to rise significantly.

Therefore, with regard to the tendency of the state in the glass industry policy at the end of the 11th and 5th period to encourage industry restructuring, in order to optimize stocks and strictly control the increment, the 12th Five-Year Plan will continue to continue this trend. National regulatory authorities require the formulation of encouragement policies for the promotion of mergers and reorganizations of enterprise groups. They shall support superior enterprises in project approval, land approval, credit allocation, and tax deductions, and encourage enterprises to build new lines, mergers, and mergers and acquisitions, and make them bigger through mergers and acquisitions and technological transformation. To be stronger, strive to achieve a 70% or more industrial concentration in the top 10 flat glass manufacturers in the next three years.

Last year, various ministries and commissions of the country proposed more directional policies for the development of the industry, promoted the merger and reorganization of enterprise groups, and enlarged and strengthened enterprises through mergers and acquisitions and technological transformation to solve the problem of excess production capacity. According to industry insiders, the overcapacity in the building materials industry is evident and the restructuring of the industry is imminent. For the domestic glass market, which is already in oversupply, overcapacity causes companies to solve the problem by expanding production. Only by way of acquisition can the industry be led to an oligopolistic competition, which will benefit the industry. Energy conservation, emission reduction and low-carbon economy are already a topic that cannot be circumvented, and are even the focus of economic development in the future. To realize this in the glass industry, optimize stocks, adjust structures, and eliminate vicious competition as soon as possible so that glass companies can There is a lot of energy in terms of energy saving, emission reduction and technology investment. Therefore, the restructuring of the domestic glass industry is far-reaching for the development of the glass industry.

However, the restructuring of the domestic glass industry has not been smooth in recent years, especially compared with the cement industry. In the building materials industry, the cement sector continued to purchase and integrate during the period of 2005-2006, and the main investors not only came from domestic industry leaders, but also included overseas industry leaders and financial investments. Since glass is very different from the cement industry in terms of ore resources, transportation radius and consumer objects, cement monopoly stories in the cement area are difficult to replicate on glass. Simply purchasing old plants is not the same as obtaining corresponding resources and markets. The actual cost is equal to or Higher than the construction of new plants, so only brand, plant and equipment are not enough to attract the eyes of overseas industry investors. Currently, there are two main acquisition entities in the industry. One is the foreign capital Hony Capital with Lenovo's domestic capital background, and the other is the building materials industry's central enterprise, China National Building Materials. Overseas glass giants mostly choose to establish their own plants.

Obviously, the integration of the glass industry is indeed conducive to improving the industry concentration and the development of dominant large enterprises. However, the actual market integration effect is difficult to achieve the effect of cement. It is also because the two largest reorganization companies in the domestic glass industry still have strategic objectives. There is a problem. For China National Building Materials, there is basically no cost input for the equity allocation method adopted by the China Construction Industry-led industry consolidation. The original company’s main business did not engage in the glass industry experience. After the collection of Luoyang Glass, Zoomlion, and Fangxing, it was necessary to intervene more in the day-to-day operations of the original company. Otherwise, the optimal combination of resources could be realized and the reorganized The integration effect. For Legend Holdings, Hony Capital has integrated some of its domestic glass assets listed in Hong Kong (China Glass 3300HK). The ultimate goal of the company's further integration with the domestic market is to purchase assets at low prices in the industry downturn and continue to sell after the industry turns around. . Therefore, it is difficult for the two major reorganizers to achieve the strategic objectives to be achieved by the industry restructuring implemented by national policies. Take Lenovo's acquisition of Yaohua Glass from China Glass as an example. Although Honor will transform Yaohua from a state-owned enterprise into a private one, the system will be greatly improved, and the historical burden will be removed. However, the essence of the future development of the company is still Relying on Yaohua's existing strengths, Yaohua's own power has great limitations.

Therefore, some experts believe that the story of the integration of the glass industry is indeed an exciting beginning, the market also has high expectations and investment enthusiasm, but the final integration process is relatively difficult, the integration time is very slow, the actual integration is also very successful Hard to reach the high point of the dream. Of course, this kind of judgment is somewhat pessimistic. At least from the current situation of China National Building Materials Corporation, we have already realized the problems in the reorganization process of the glass industry and set up a glass company to solve the problems in the reorganization process as soon as possible. I believe that as long as we In this hurdle, the smooth path of industrial restructuring is ahead of others.

From the current situation of the domestic glass industry, although the industry restructuring has been deeply rooted in people's minds in recent years, in terms of the individual strategic development of glass companies, it still shows the regional nature and limitations of glass companies as their center of development, even by local The influence of the government is very large, and the integration of the entire industry resources has not been taken into account too much. For example, the Jiangsu Waldorf Group is a large-scale float glass company. The company has 20 float production lines and 72 million weight boxes per year of production capacity. The total glass production and sales volume of the company ranks first in the domestic industry for 11 consecutive years. Its development strategy is still Its own expansion. Another example is China Glass. Although it is dominated by capital operations, as a local government, it still proposes to integrate industry resources to form an agglomeration effect, to strengthen the glass industry cluster in Suqian, and to build Suqian into a glass city in China. At the same time, it is necessary to quickly break the distribution of scattered glass companies in Suqian and manage their own affairs. It's a little bit of meaning that has changed Shahe Glass Industry Group this year.

In recent years, Shahe City, Hebei Province has followed the trend of industry consolidation and established Shahe Glass Group to integrate the glass industry in the city and enhance the competitiveness of the city's glass industry. Under the requirements of national policies and provincial and municipal leaders, Shahe is supported by glass group to improve product quality, increase sales revenue, increase the level of technological innovation and the market influence of the city's glass, in order to rank among the top ten glasses that the country will focus on in the future. Group of companies. The company is initiated by ten companies in this city and named "Hebei Shahe Xinlian Glass Group". After the group is established, it will use assets as a link to standardize the management of the extraction and processing of raw materials and the sales of products. It will continue to develop new projects, carry out cooperative investment and asset integration, and conduct image packaging and publicity for the glass industry and enterprises in the city. To create a glass brand in Shahe City to increase the visibility and market competitiveness of the city's glass industry at home and abroad. In any case, the reorganization and consolidation required by the domestic glass industry is obviously not limited to this, and it is more necessary to reorganize and integrate cross-regional and cross-industry chains so as to strengthen the optimization and integration of resources in a wider range and at a deeper level. The sustainable development of the domestic glass industry shows its vitality.

As 2010 is about to pass, the 12th Five-Year Plan will be finalized and implemented. With regard to the development of the 12th Five-Year Glass Industry, Galaxy Securities predicts that the increase in investment in fixed assets will determine the growth in total glass demand in the next five years. With the impact of positive factors such as the urbanization of the west, the implementation of the regional rejuvenation strategy, the acceleration of the construction of affordable housing, and the promotion and implementation of building materials to the countryside, it is expected that the compound annual growth rate of glass demand will stabilize at the 10% level in the next five years. It is estimated that in 2011, the net capacity of newly added float glass will be 50 million weight boxes. There will be a phased oversupply situation in the regional market. With the rise in energy prices and the increase in environmental protection costs, the compound annual growth rate of average glass prices will increase by 10% over the next five years. Glass industry concentration in 2015 will reach 60%. This judgment, as a whole, should be a reflection of the development of the glass industry. It is believed that 2011 will be another starting point for the restructuring of the glass industry.