Severe homogeneity of wire and cable industry

In recent years, the development of wire and cable has mainly depended on the rapid growth of China's economy and the domestic demand for domestic demand, but also because the cable industry continues to grow and develop. In recent years, the domestic cable industry has also highlighted many defects. These kinds of defects It also seriously hindered the development of China's cable industry.

Among them, due to the fact that domestic cable companies are concentrated in the low-end market and have insufficient independent research and development capabilities, they have caused serious homogeneity. In addition, surveys conducted by some government agencies on domestic cable products also show that the quality of cable products in China is low at low levels, and even some companies lack of integrity, and adopting bad competition means to gain benefits, but it causes great damage to the cable industry. . I still remember that last year Guangdong Foshan conducted a random inspection of the cable product quality. As a result, 10 cable products were found to meet the standard and only one was found, which dishonors the industry.

Due to various shortcomings in the cable industry, it seriously hindered the development of the cable industry, and thus directly caused the Chinese cable industry to be “large but not strong”. Domestic large-scale cable companies, compared with the large-scale cable companies in developed countries in Europe, can be described as trivial, even incomprehensible, and they have no comparability. To solve this problem, perhaps the “industry integration” that has raged over a decade ago is the final way out.

It may be said that the reorganization and integration of China's cable industry is a general trend and is the fundamental reason for China's cable industry to become bigger and stronger. But today's point of view, due to the intricate interests of all parties, has always hindered the pace of restructuring and integration, has been to allow the reorganization and integration of the Chinese cable industry in writing or oral, and difficult to put into action. Currently, apart from the success of several mergers and reorganizations, the vast majority of restructurings are not going well.

In November 2009, Warren Group Co., Ltd., the first major shareholder of Sichuan Jinding (Group) Co., Ltd., has absorbed and merged Zhejiang Hualun Communication Group Co., Ltd., Zhejiang Hualun Group Communication Equipment Installation Engineering Co., Ltd., and Fuyang Shaoshan Cable Co., Ltd. Wire Co., Ltd., Hangzhou Prince Optical Fiber Material Co., Ltd. and Zhejiang Wright Communication Material Co., Ltd.

In July 2010, Jiangsu Jingwei Cable Co., Ltd. absorbed Wuxi Jingwei Cable Co., Ltd., and all its debts and liabilities were inherited by Jiangsu Jingwei Cable Co., Ltd.

On July 2, 2011, Nexen Cable Co., Ltd. of France officially announced that it has signed a joint venture with Shandong Yanggu Cable Group, of which Nexans will spend 1.24 billion yuan.

The author takes a peek at the fact that breaking the industrial integration problem requires not only policy and timing, but also development-oriented, and clear choice. In the future, the industry consolidation road still faces more constraints and challenges. There are several reasons that have gradually become evident:

First, the ownership of domestic enterprises differs from that of foreign countries. There is a certain difference between the ownership system of Chinese cable companies and the Western developed countries. In western countries, we find that they use private ownership as the economic basis. In China, cable companies have four types of capital, state-owned, joint venture, private, and wholly foreign-owned. Therefore, from the aspect of integration, there is a certain degree of difficulty.

Second, the interest relationship is complex. The integration of China's cable industry involves a large and complex interest group, which can even be said to have exceeded the scope of the company. such as:

First of all, from the perspective of the government, the development of cable companies is more concerned because the huge economic pull of the cable industry has attracted the attention of the government. Not only is it concerned by the central government, but it is also a concern of local governments because of the cable industry. Not only can we solve the employment problem, but also can drive GDP. Therefore, local governments are trying hard to use the cable industry as one of the pillar industries for economic development.

Second, the integration of the cable industry involves the game of direct stakeholders. Once the integration fails, it is often not your death or death. Therefore, concerns about the prospects of the company make the direct stakeholders (companies) be cautious in the integration process, and must be step by step, especially at the disadvantaged side, but have to step by step fortification.

In fact, the intricate interests of all parties in the game has always been a major obstacle to the slow progress of industry consolidation. In other words, when we can find more accurate and fair ways or channels to solve the interests of the game, for the accelerated integration of the cable industry will play a great role in promoting.

Third, the difference in the promotion mechanism. From a global perspective, in Western developed countries based on private ownership, industry consolidation is basically dominated by market mechanisms. Needs no integration, how to integrate, is purely the behavior between two companies, the government often does not interfere. In China, however, it is different. Due to China's special national conditions and the actual situation of the cable industry, a large number of small and medium-sized cable companies are destined to lack the motivation for restructuring. Under such circumstances, how should the government act as an individual? At this time, the government should play the role of a leader and policy maker in the industry. Through the market mechanism and the policy mechanism, both sides should work together to promote the integration of the cable industry. With reorganization.

Fourth, many cable companies that resisted being merged. For the merger and reorganization of the cable industry, many companies often have a misunderstanding. From a literal understanding, the understanding of “merger and reorganization” is naturally “big fish eats small fish and small fish eats shrimp”. Therefore, some small-scale or disadvantaged cable companies are often more resistant to it, and are worried about infringing the interests of certain stakeholders. The benefits have already been gained, and these stakeholders do not consciously give up the benefits that have already been and may be obtained.

It is also for this reason that the merger and reorganization of the cable industry has been difficult to implement because no one wants to be merged. For some cable companies, being merged is equivalent to being “destroyed” and it is not good for themselves. No one will be willing... No matter what, no matter how many obstacles or difficulties will be encountered in the merger and reorganization of the cable industry, at present, China’s cable industry wants to “get bigger and stronger” and get rid of low-end, disorderly competition and vicious competition. Concerns, and to the development of high-end markets, mergers and reorganizations are the only way. From a social point of view, mergers and acquisitions are also an inevitable trend of social development. It is a sign of social progress.

How to effectively solve the integration problems in the cable industry requires not only policies and timing, but also the need to take enterprise development as the leading factor and industry development as the foundation, and clearly understand the significance of mergers and reorganizations, on the basis of taking into account the interests of all parties, With more pragmatic strategies and a more open mind, only in this way can the merger and reorganization of the cable industry be separated from the paper and the word of mouth and implemented in practice.