Recently, Yongjia County hosted the China (Yongjia) high-level development seminar for the valve industry. This seminar coincided with the urgent transformation of the Yongjia valve industry. Wenzhou Valve: No "gold mine" before, followed by international high-end pump valve, where is the road? Entrepreneurs are troubled by how they are transformed. They also hope that a brainstorm can provide them with a clear picture of the industry's prospects, and that these enterprises will not be able to make economic progress at home and abroad, export growth will be slow, and there will be high levels of surrogacy. A series of dilemmas of value products quickly come out.

status quo:

The worst situation in the past 10 years

Many companies are facing no order

After more than 40 years of development, Yongjia's valve industry has become the first pillar industry in Yongjia County. Yongjia is currently the largest and most concentrated production base for pump valves in the country. In 2012, the pump and valve industry realized a total industrial output value of 24.7 billion yuan, a year-on-year growth of 9.8%, and self-export volume of 279 million US dollars, a year-on-year increase of 27.93%, becoming the fastest growing industry in Wenzhou.

But the glory belongs to the past. This year, Yongjia valve companies have experienced the most severe year in the past decade. From January to June, Yongjia exported 110.11 million US dollars worth of pump valves, an increase of -22.05% year-on-year. According to statistics from the People's Bank of China, in July, the Yongjia China Pump Valve Composite Price Index closed at 1005.00 points, an increase of 0.45 points from the previous month and an increase of 7.33 points from the end of last year. In July, the total turnover of pump valves included in the price monitoring of pump valves was 109.7656 million yuan, a decrease of 12.5653 million yuan. There are two main reasons for the rise of the corporate price index in July: First, the purchase price of raw materials has risen. Second, the labor force is relatively tight, and labor costs have risen.

“The domestic decline in valve sales this year was mainly due to the excess industry in the valve industry, and the market share has been declining. The export situation is relatively optimistic.” Huang Shengfeng, president of the Zhejiang Pump Valve Industry Association, said. 15% of small and medium-sized valve companies have reduced their orders this year. Workers do not need to work overtime. Many workers begin to return home. Only enterprises above the designated size still maintain a certain growth trend. In the first half of this year, Yongjia's 106 above-scale pump companies completed sales. 4.204 billion yuan, a year-on-year increase of 1.59%.

“After the beginning of this year, the general response of pump and valve companies has been relatively cool. Except for leading companies such as Chao Da, Bethel, and Founder, which are busy with the orders that they left last year, many companies, especially small and medium-sized enterprises, have significantly reduced their orders and even have no orders. "Chen Wenrong, secretary general of the Yongjia County Pump & Valve Industry Association, said. At present, the status of the entire industry, in addition to domestic and foreign economic factors, Wenzhou valve industry itself also has a certain shortage. “The Wenzhou valve industry is relatively small and scattered. Compared with the other three production bases in China, the only remaining advantage is that the industrial chain is relatively complete and the supply is fast,” said Huang Shengfeng.

According to Huang Shengfeng, under the increasingly fierce competition, labor costs and logistics costs have been rising year by year, the traditional valve industry in Wenzhou is facing pressures such as market saturation, low-price competition, and thin profit margins, and the original competitive advantage is weakening. The real brand leading enterprises lack the ability of enterprises to innovate, and the transformation and upgrading of the industry are imminent.

Transformation:

Leading companies engage in scientific research to high-end products, SMEs mergers and reorganizations to achieve win-win

In the face of difficulties and the need for transformation, many Yongjia valve companies began to explore the transformation of the road, some leading companies to engage in scientific research and develop high value-added high-end products. On August 18th, Xuanda Group's major nuclear power project launch and R&D building was laid. The AP Series MS26 equipment launched by the Xuanda Group is one of the major special research projects for nuclear power in the country. This is also the transformation of Yongjia valve companies into high-end equipment manufacturing. A new starting point for innovation. "The total investment is about 470 million yuan, and it is expected that the new output value will be more than 700 million yuan after completion. This new project has promoted the development of industrial enterprises to the high-end equipment manufacturing industry," said the relevant person in charge of the company. It is understood that this equipment is used in the start-up process of the AP series pressurized water reactor nuclear power plant, and its function is to discharge the air of the reactor coolant system in the shortest possible time, creating conditions for the operation of the system. This time, Xuanda Group has also set up a research and development building, which is also an expansion of the company on the road to transformation, focusing on R & D to engage in scientific and technological products, while addressing the lack of experimental origin, training practical and skilled personnel.

The transformation of valve companies no longer stays on the path of generation processing, and more companies increase investment in technology research and development and brand marketing. Such as Chaoda, South, Founder and other valve leading enterprises, have to rely on their own technological advantages into the nuclear power and ultra-supercritical thermal power units and other high-tech fields. Bertley Valve Group also adjusted its product structure, gradually withdrew from the metallurgical and other industries, and turned to high-end products in the fields of petroleum pipelines and chemical engineering. It focused on the development of PetroChina LNG cryogenic valves, large-diameter flat gate valves and other new products.

At the same time, a number of companies began to change from initial OEM processing to the “two-wheel drive” of technological innovation and private label building. Such as the ultra-supercritical valve independently developed by South Valve Co., Ltd. has become the only company in our province listed as a major thermal power project by the National Development and Reform Commission; Yongyi Valve Group Co., Ltd. is famous for producing safety valves. The company has now obtained EU market access permits. If this year's application for certification by the American Society of Mechanical Engineers is successful, it will be the first company in China to obtain this certification, and brand awareness can be further improved.

As one of Shell's three largest suppliers in China, Wang Hanzhou, chairman of Zhejiang Chaoda Valve Co., Ltd., said that last year the company incorporated 4 national Torch Plan projects and obtained 21 authorized patents throughout the year, and currently has 56 patent projects. Last year, sales revenue was 486 million yuan, of which 16.33 million US dollars was exported, a year-on-year increase of 205%.

According to the data, as of the end of 2012, Yongjia Pump & Valve has 30 high-tech companies in the industry, accounting for 65% of the total number of high-tech enterprises in the county; it has won one provincial-level technological innovation enterprise; and has 10 municipal technology innovation enterprises. There are 1,963 self-produced and sold pump valves and related companies, 1,435 individual enterprises, and 41 companies.

For SMEs in the Yongjia valve industry, their transformational roads are even more difficult. Without innovative products and research and development teams, small and micro enterprises that rely on processing and surviving will go even harder in the coming days.

However, in the most severe period, many small and medium-sized enterprises began to look for new ways - mergers and reorganizations. "This may be a better way for small and micro enterprises to transform themselves. At present, many leading companies are looking for mergers and acquisitions with small and micro enterprises that have differentiated their products to achieve a win-win situation," said Huang Shengfeng.

In addition, the local competent authorities are now working with the Pump Valve Industry Association to prepare for the establishment of a public service platform for “Pipe Valve Product IoT” aimed at enhancing the added value of pump valves, and “Pump Valves” designed to improve the efficiency of resource integration deployment. Industrial technology management "public service platform, through this platform to bring more new business sales channels.

Weapons:

Enterprise innovation ability is not lacking High-end products should clearly define their own capabilities to create supporting platforms

In fact, the transition of the entire valve industry is still in the initial stage of exploration. Many entrepreneurs are fully aware of the current difficulties faced by the valve industry and the urgent need for transformation of enterprises, but the “new” path of innovation and transformation is still going. There is no end in people's hearts. This is also the most mentioned issue by valve entrepreneurs at the seminar on high-end development of China's (Yongjia) valve industry.

The chairman of Zhejiang Chaoda Valve Co., Ltd. Wang Hanzhou raised this question at the meeting: “The company turned to high-end products, and the requirements of many high-end international valve products are not known by the company. The lag in the source of information also makes There is a lot of confusion in the transformation of enterprises.” Another entrepreneur stated: “The country will vigorously expand its marine resources. This is an opportunity for valve companies, but our products lack innovation and are not competitive. Based on the Institute of Pump and Valve Research, how to integrate resources, gather information at home and abroad, conduct R&D and connect with companies is also something we need to do.”

In response to the difficulties and problems currently faced by the Yongjia valve industry, Huang Wei, deputy director of the Energy Conservation and Technology Equipment Division of the National Energy Administration, said that Wenzhou enterprises are less likely to enter localized joint research and development echelons. An important reason is that the company’s innovation capability is not strong. Lack of professional products with competitive advantages. At present, there are oversupply of common products related to pumps and valves, but high-end products still rely on imports, and research and development are in great demand. As the country changes its energy consumption model, it will also derive demand for pump and valve products, especially in the areas of deep processing of coal, offshore oil development, shale gas development, and natural gas liquefaction. In addition, she suggests that companies use services as part of product sales to transform sales patterns and stimulate growth.

During the 12th Five-Year Plan period, the traditional industrial industries including pumps and valves will face difficulties in the development of insufficient market demand, unreasonable structure, lack of innovation capacity, and insufficient environmental resources. The Yongjia pump and valve industry needs to carefully study the market demand and define its own production. Ability to build high-end pump and valve supply products supply platform to form an industrial base integrating product development, design, manufacture, integration, and support.