Guangdong power cuts storms invaded ceramic products prices provoked controversy

The continuous development of the sanitary ware industry, since the Gaoyao City Economic and Trade Bureau of Guangdong Province issued a notice regarding the implementation of the “Gaoyao City Energy Saving Early Warning and Control Implementation Plan” for a specific time limit, the storm of power cuts and production cuts engulfed the entire industry. Some ceramic companies in Yao, Qingyuan, Zhaoqing, and Foshan have been involved in the storm center where production has been suspended. For a time, the event of power curtailment attracted the widespread concern of the upstream and downstream industrial chains of the ceramic industry, becoming the most popular topic of the moment. Various media have competed to track reports and the impact of the incident has also been further expanded and upgraded.

With the implementation of Guangdong's large-scale power-restricting measures, some production lines were shut down, and existing production lines were difficult to operate at full capacity, directly affecting the supply of bricks and raw materials. The news of price rises in bricks and mortar in the industry for the time being, and the cries for price increases in ceramic products Increasingly higher and higher.

At present, in response to the price issue that people are generally concerned about, the reporter visited a number of ceramics companies responsible person, in-depth understanding of the company's interpretation of this incident and attitude.

Corporate statement

Rising: Cost Increases, Output Decreases to Main Cause

“The ex-factory price of some ceramic products on the market has now been raised, and some companies have also entered the planning stage on the price increase program.” Mr. Lin, the head of a ceramics company in Sanshui District, Foshan, said to reporters.

According to Mr. Lin, in order to cope with the current power-limiting measures and meet the normal operation of the production line, in addition to the limited supply of electricity every day, most ceramic companies will add generators to generate electricity to ensure production needs. "The cost of using a generator is too high, once the electricity is more than 1 yuan higher than the normal electricity supply price, an average production line has to increase the cost of 1.5 million or so at least one month, and the production cost has increased by a large amount."

A ceramics company in Nanhai District, Mr. Zhang told reporters: "The ceramic industry itself is an industry with a low single product profitability. It can only be achieved by relying on volume to increase profits. Now it has a huge extra electricity fee, which is bound to apportion the product price. In the middle, raw materials, production equipment, and labor costs have been rising, and companies are taking more cost pressures. Some companies that produce middle- and low-grade products are almost approaching the "life and death line," and price increases are imminent.

Not up: Insufficient inventory and price game inhibitions

“Limiting electricity production and stopping production has indeed had a certain impact on the ceramics industry. The impact on some small and medium-sized sanitary ware companies, especially private-disposal factories, is particularly great. Some of the best-selling commodities will increase slightly, but in terms of the overall market, prices will not Too much change.” Mr. Li, a well-known ceramics company in Gaoyao City, told reporters that “this year under the most severe real estate policies in the country, the building materials industry has also been affected, the overall sales are not as good as in previous years, inventory is relatively serious, you can It is said that more than 80% of the ceramic enterprises have the phenomenon of “explosion of warehouses”. Under the condition of power cuts and production stoppages, the company’s inventory pressure will be released, and the price increase will be more of a marketing tool, prompting distributors to suppress the goods. Transfer company's inventory pressure."

In the face of price hikes, more people in the industry generally hold a negative attitude and believe that the game of a few parties has inhibited the rise in prices: First, the game between the Foshan producing areas and other producing areas. Over the years, the Foshan brand has had excellent quality and excellence. The cost-effectiveness and good reputation have established a firm foothold in the market and established a high-end brand image. As production capacity in foreign production areas continues to increase, the Foshan brand will increase its product prices and lose a considerable portion of its market share. Second, the local brand of Foshan games. As an industry where the homogeneity of products is extremely serious, prices are often the main considerations for the distributors to choose the brand. The price increase means that they give up the price advantage; the third is the game between manufacturers and distributors, and with the intensification of market competition. The market price of ceramic products has stabilized, dealers as the channel's controllers are more inclined to high-profit brands, and price increases will also mean that dealers will be pushed to competitors, channels will be surrendered, and the market will be determined prominent.