cement industry. Serious over
capacity, sustained low prices and losses for most enterprises are no longer the plight of one or two enterprises, but the general situation of the whole industry. In the communication with China Cement Network, many enterprises have turned their attention to an old word-setting up a fund to remove production capacity and promoting mergers and acquisitions.
But this word has been shouted in the cement industry for many years. Why has
the capacity fund been standing still for many years?
Speaking of it, the capacity fund is not a new thing, and the industry has been discussing this topic for at least ten years. To date, however, there has been little substantive progress. The reasons are not complicated, but each is a real obstacle. When the
market is good, buyers and sellers can't reach an agreement. Large enterprises have the desire to buy, but small enterprises can get by and are not in a hurry to sell, either reluctantly or at an unreasonable price. There are people making money in the market. Who wants to sell themselves? As a result, the opportunities for mergers and acquisitions were missed again and again in the bargaining between you and me. When the
market is bad, the problem changes its face, but the essence is the same-it can't be discussed. At this time, large enterprises are not well off, and the financial pressure is the first to bear the brunt. What is more difficult is that the acquisition of a difficult enterprise and the closure of the production line may involve the risk of the loss of state-owned assets. This red line has made many decision makers back down. And those small enterprises whose competitiveness is already very weak still have illusions in their hearts, always feel that they can sell at a good price, and refuse to bow their heads.
As a result, those who buy dare not buy, those who sell are unwilling to sell, and the fund for capacity removal appears in industry forums every year, but stops in PPT every year.
De-capacity is a slow problem, which is an objective reality. The establishment of funds, the promotion of mergers and acquisitions, the integration of resources, the closure of backward production capacity, and the reshaping of the industry structure can take at least five years or more than ten years, which is by no means an overnight task. That's the
problem. For the incumbent leader of an enterprise, this may not be able to see the results during his term of office, and may even affect the performance of the year because he bears the acquisition cost, disposal cost and personnel placement cost in the short term. Who will do this kind of thing that "the former planted trees and the latter enjoyed the cool"?
This is not a question of personal consciousness, but a realistic dilemma under the current assessment mechanism. There is a structural dislocation between short-term interests and long-term value, and the matter of capacity removal is also a matter of long-term vision to understand the value.
It is undeniable that some large enterprise groups are indeed promoting integration, and there are real cases of mergers and acquisitions, but sporadic cases can not change the overall situation. Systematic capacity removal at the industry level is far from enough to rely on the consciousness of individual enterprises.
It's time
to move. Some people may ask: Since it's so difficult, why not continue to maintain the status quo?
Staggered peak production has been tried, several rounds of production restriction coordination have been tried, and industry self-discipline initiatives have been shouted over and over again-these means can still maintain a superficial balance when the market is good, but in the current situation of overall losses, they have basically failed. Relying on these "soft" means to resolve structural surplus is like using band-aids to deal with fractures, which are reluctant to cure the symptoms. When the
cement market is still good, the industry did not seize the key window period of capacity-this is a heavy historical account. In the years when prices rose, it was the best time to integrate backward production capacity and enhance concentration, but the opportunity passed. Now it is more expensive and more difficult to promote capacity reduction, but there is no way out.
Difficult doesn't mean you can't do it. It is precisely because of the difficulty that no one can easily get through this road, once through, it is the real moat. Setting up a fund to reduce production capacity and promoting mergers and acquisitions in the industry may be the only way for the cement industry to get out of the current quagmire. There is no winner-take-all shortcut in this matter, which requires the responsibility of large enterprises, the matching of mechanism design, the support of policy level, and the abandonment of unrealistic illusions by small and medium-sized enterprises. When
the industry breaks down, it never starts until it's ready. The longer you wait, the higher the price.
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