How the Machinery Industry Copes with the Advent of the High Steel Price Era
The weighting and grading system is used at the poultry slaughterhouse to automatically weigh the poultry carcasses and grade,
sort the weight of the poultry carcasses according to the customer`s request.
The machine could stat and record the weight of each grade by itself, has a storage and memory function as well as could archive and retrieve the completed records.
The grading procedure only needs the manual feeding, other procedures are all automatically, it is very helpful for the poultry processing automation management.
Chicken Belt Weighing And Grading Machine, Chicken Sorting Machine, Chicken Belt Grader, Chicken Overhead Grader Connect Group For Poultry Project , https://www.connectpoultry.com
According to the "Blue Ocean Strategy" published by the Harvard Business School, the company's Red Sea strategy is mainly how to compete in the existing and known market space. What we need to analyze is the competitive situation and the conditions of the existing industry. The Blue Ocean Strategy is There is no limit to existing industry boundaries, and many times it can be opened in the Red Sea. Differentiation is part of the blue ocean strategy. Segmentation is the discovery of blue oceans, and design innovation is the creation of blue oceans. Analysts believe that the value chain, industrial chain and process reengineering are the major trends in current industrial development. For the machinery industry enterprises, the implementation of Blue Ocean Strategy not only needs to strengthen the industrial chain cooperation and technological innovation, expand market segments and modern service industries, but also need to actively promote energy-saving emission reduction, energy conservation and emission reduction into the company's process innovation system.
The highest pressure on machinery industry under high steel prices
Statistics show that in 2006, China produced 466.85 million tons of steel, minus 43.01 million tons of export steel, and domestic production of 42.384 million tons of steel; automobile industry used steel was 17 million tons, and shipbuilding industry used 5.66 million tons of steel. With 5 million tons of steel and 57 million tons of steel for mechanical industrial use, which accounted for 13.4% of the total domestic iron and steel production that year, it is a true steel user.
Compared with iron and steel companies that can increase their prices, it is difficult for machinery companies to send prices down. The machinery industry is a highly market-oriented industry. The competition is fierce. If the downward pressure on price increases is transmitted, customers may be lost. Even if the price of the product is increased, the margin will be smaller to ensure sales, which will not cause a drop in revenue and profits.
Steel products generally account for 20% of the cost of mechanical products, 30% for heavy equipment, some 50% for forged casting products, and 60% for power generation equipment. The cost of steel in some mining machinery, port machinery, and construction machinery can even reach 70. %the above. A 10% increase in steel prices will have a very big impact on the machinery industry. In 2007, the profit margin of the main business income of the machinery industry was only 6.19%. Even if calculated according to 20% of the average cost of steel, the profit of two percentage points should be squeezed out. Some forging foundry heat treatment companies even have to squeeze out 5 percentage points of profits.
Heavy machinery industry should strengthen industrial alliance
In the long run, large and medium-sized machinery companies should strengthen their vertical integration with iron and steel companies and cross-share each other to share the risk of steel price increases, especially in the heavy machinery industry.
The heavy machinery industry is characterized by a large number of long-term products, most of the delivery time is 4 months or more, more than 1 year, the basic material composition is mainly steel, and other non-metal materials are less than 0.5% of the product weight. As the supply contract has already been signed, the price of the product cannot be readjusted. The increase in raw material prices can only be borne by the company. In fact, many products in the heavy machinery industry are geared to the steel industry. Steel companies are both raw material suppliers and product users, and should share some of the losses caused by raw material price increases for heavy machinery companies.