Overcapacity such as titanium dioxide promotes merger and reorganization

It is reported that relevant ministries and commissions have clearly issued the task of eliminating backward production capacity, but the implementation of the situation is not optimistic, China's investment in high energy-consuming industries is still accelerating, the risk of excess capacity is still accumulating.

De-capacity is advancing in a high-profile manner. From the perspective of recent trends, improving industry access thresholds, raising standards for environmental protection, safety and cleaner production, and recycling economy, encouraging mergers and acquisitions among leading companies, and guiding investment to drive demand will be the main measures for compressing backward production capacity.

Although the macro economy has initially stabilized, the issue of overcapacity in many high-energy-consuming industries such as steel, cement, flat glass, and coal chemical industry is still becoming apparent as effective demand remains insufficient.

Data show that in 2012, China issued a total of 19 industrial industries to eliminate backward production capacity targets. Compared with 2011, 12 new industries such as the elimination of backward production capacity in the lead-acid storage battery industry, coke, ferro-alloy, copper smelting, lead smelting, cement, and flat glass have increased in 2012.

Taking the cement industry as an example, the first batch of companies that eliminated the backward production capacity issued by the Ministry of Industry and Information Technology involved a total of 2,579 enterprises, of which 1,503 were cement companies, accounting for 40.8%, and the elimination of the cement industry also increased year by year. In 2010, it was 1,072.77 million. Ton, in 2011, it was 152.857 million tons, and in 2012 it was 277.77 million tons.

“Our research shows that most cement companies do not feel bad about the elimination list. There are two reasons: First, they are similar to each other in age. Many companies often appear in their shadows, or they have to be eliminated, or difficult to eliminate; the second is the spring breeze. Breeding and reincarnation, weeding out the looping game that seems to enter cats and mice, the windy stools stopped working, and the winds went off and started again, said Lu Ning, analyst at Zhuo Chuang Information Technology.

Lu Ning said that according to the requirements, shaft kiln cement and cement mills under 3 meters should be eliminated. However, in Rizhao, Shandong, many such small enterprises are still producing. This is because local governments are reluctant to eliminate these small enterprises for the sake of tax revenue growth; on the other hand, these small companies do not have the financial strength to re-evaluate the production lines. Although the quality of the products produced with these backward equipment is not good, the production cost is much lower. If the new production line with a daily output of 5,000 tons is to be used with funds of 300-500 million yuan, and the small enterprises have no strength, they can only purchase cement from outside. Clinker, which will increase production costs.

"In fact, not only Shandong Rizhao, basically every province has this situation, more common." Lu Ning said.

“Investments in high-energy-consuming industries are accelerating.” Xu Ze, a researcher at the National Information Center, told the “Economic Information Daily” reporter that high-energy-consuming investments in 2012 continued the accelerated growth since the beginning of 2011 and accumulated from January to October. The year-on-year increase of 21.7% was 3.4 percentage points higher than that of the same period of last year. Despite the slowdown after June, it was still higher than the total investment growth.

Xu Ce said that in the context of the economic slowdown, various localities in order to ensure the goal of achieving economic growth, and even individual areas want to "turn overtaking", the approval of high energy-consuming investment may have eased. Especially in the central and western regions, in the process of undertaking industrial transfer in the eastern part of the country, a considerable number of industries belong to high energy-consuming industries.

According to calculations, during the “Twelfth Five-Year Plan” period, Xi’an’s Yubei Industrial Park and other major industrial projects require more than 500,000 mu of land for construction. Currently, only 40,000 mu of land is planned for construction each year, and the gap in land use indicators is very large. The "extensive utilization" of land resources in many new industrial projects still occurs from time to time. Many industrial projects have a clear "enclosure" color.

According to industry analysts, the above phenomenon is mainly caused by the government and enterprises' interest-seeking rent. When the elimination of the traditional drama of “thunder and rain” is small, it is customary for the industry to become numb. In 2012, steel, cement, plate glass, coal chemical industry, shipbuilding, titanium dioxide and other industries have begun to experience a large excess of production capacity. Many people in the industry have stated that overcapacity will become an obstacle to the development of these industries in 2013. One of the main risks.

The steel industry has also been plagued by the “overcapacity” malaise. According to the latest statistics from China Iron and Steel Association, from January to November 2012, the accumulated investment in fixed assets of the steel industry was 594.6 billion yuan, up 6.5% year-on-year, of which black smelting and rolling industry investment was 455.6 billion yuan, and the total investment was a record high. The industry has added more than 50 million tons of steel production capacity.

"The issue of overcapacity has not been effectively solved. The reason is that the inertia of economic growth and the long-term adjustment of the industrial structure are the first." Hu Chi, a researcher at the State-owned Assets Supervision and Administration Commission of the State Council, told the "Economic Information Daily" reporter that the macroeconomic background The economic situation in recent years is also not conducive to the adjustment of excess capacity. The practical priority of the "guarantee growth" goal has further complicated the task of "adjusting structure". In actual operation, short-term “guarantee growth” will always overwhelm the long-term “adjustment structure”.

The most direct solution to the problem of overcapacity is to eliminate backward production capacity through mergers and acquisitions. The Communist Party of China Institute of Industrial Economics and Industrial Economics Huang Qunhui said that it is an important task to optimize the industrial structure as a breakthrough to coordinate the strategic adjustment of the economic structure, control overcapacity and eliminate backward production capacity, and transform and upgrade traditional industries.

The Central Economic Work Conference emphasized that we must make full use of the forceful mechanism formed by the international financial crisis and focus on resolving the contradiction of overcapacity. The general principle is to respect the laws, to separate employment, to implement multiple measures, and to address both the problem and the root cause. It is necessary to strengthen the prediction of the development trend of various industries with overcapacity and formulate targeted adjustment and resolution plans.

The subsequent executive meeting of the State Council also proposed five policy measures to promote the healthy development of the photovoltaic industry. The first one is to encourage enterprises to merge and restructure, eliminate backward production capacity, and improve the level of technology and equipment.

The annual work meeting of the Ministry of Industry and Information Technology requires that in 2013, it will continue to “adjust and optimize the industrial structure” and will “work hard to resolve the contradiction of overcapacity”. The Ministry of Industry and Information Technology clearly stated that it is necessary to formulate targeted work programs and effective measures to digest a batch of production capacity, transfer a batch of production capacity, integrate a batch of production capacity, and eliminate a batch of production capacity. Miao Wei, Minister of the Ministry of Industry and Information Technology, stated that in 2013, it is necessary to accelerate the merger and reorganization of overcapacity industries and issue guidance on the implementation of merger and reorganization in key industries.

On January 8, 2013, the Ministry of Industry and Information Technology of the State Electricity Regulatory Commission printed and issued the "Circular on Strengthening the Supervision of Power Energy-Saving and Emission Reductions and Doing a Good Job of Eliminating Outdated Production Capacity," stating that it is necessary to promptly issue a power cut-off notice to the backward production lines listed in the annual bulletin list. . The power supply enterprise shall strictly implement the decision of power cuts and power cuts made by the government and its authorized departments according to law, and impose restrictions on power cuts for related enterprises as required.

According to a reporter from the "Economic Information Daily", nine ministries and commissions including the National Development and Reform Commission, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission and the Securities Regulatory Commission are brewing relevant policies to promote iron and steel, automobiles, cement, machinery manufacturing, electrolytic aluminum, rare earth, electronic information, medicine, etc. Eight major industries are merged and reorganized. It is reported that in the next step, the country will formulate more fiscal, fiscal, and industrial policies to promote mergers and reorganizations.

Insiders pointed out that for many years, the central government and local governments have been stressing the prevention of excess production capacity. This time it is emphasized that the industry involved in this round of overcapacity has a wider scope and a higher level of surplus. From the perspective of some recent industry trends, raising industry access thresholds, raising standards for environmental protection, safety and cleaner production, and recycling economy, encouraging mergers and acquisitions of leading companies, and guiding investment to drive demand will be the main measures for compressing backward production capacity.