The Development Trend of Fastener Manufacturing Industry by Regions
1. Wurth Group, the largest fastener company in the world, settled in Shenyang
Wurth Industrial Zone built by Wurth Group of Germany held its ground breaking ceremony formally. As the world’s largest fastener supplier, Wurth Group has set up 370 subsidiaries in 83 countries across the globe, fourteen of which locates in China. After a competition with other cities and the investigation made by the company in Germany, Shenyang won. An agreement is signed on September 14th, last year and Wurth Industrial Zone settled Europe Union Economic Development Zone of Shenyang, which, as the largest European enterprise in the Economic Development Zone, will be the headquarter of Wurth Group in China. Wurth Industrial Zone covers an area of 300,000 square meters with 131,000 square meters used in the first stage of the program, the investment of which is 100million Euros. It will be the leader in mechanical manufacturing industry after the program is completed. The products include industrial assembling, equipment maintenance, appliance installation, mechanical processing, architecture fitment, heater and woodwork, and automobile maintenance, etc. It is predicted that the annual output of Arnold Fasteners (Shenyang) Co., Ltd which is set up in the beginning period, will be 11billion pieces. And the base, where thin layer solar batteries are produced, will solve the energy shortage problem by advanced new type of energy.
2. Xingtai Ningbo Fasteners Co., Ltd builds the largest fastener export base in Northern China
With the acceleration of economic globalization, manufacturing industry transfers to China so that most cities in China develop to be the base of manufacturing industry in the world. Thus, China becomes the major manufacturer of fastener in China. With the rapid development of the fastener industry in China, many shortcomings emerge, such as the unreasonableness of product structure, enterprise distribution and resource allocation, which affect the development of fastener industry in China greatly, and drives it develop into professional enterprise groups. Xingtai Ningbo Fasteners Co., Ltd was incorporated in this context. It draws the attention as well as the comment from insiders shortly after its establishment, and it is regarded as the “demonstration project of the transferring of fastener industry.
The Status quo of Fastener Manufacturing Industry
Since the period of 2002 to 2006, fastener industry in China increased substantially with an annual increase of 15-18. In the becoming years, it will keep on growing at a steady rate which is directly correlated with consumption level of steel in China, the fast increase in automobile industry and the promotion of consumption structure. Specifically, the investment in 2007 and 2008 will stop being so hot, but it will still increase steadily.
Since 2007, China has made great progress in energy conservation and consumption reduction. However, the task before us is still immense. In the first quarter, the 6 high energy consumption industries increase by 20.6 in average, as a result of which, generated energy grows in the whole country by 15.5. As a result, the high energy consumption industry develops blindly again which make the energy conservation in China more severe. Thus, a new round of action to save energy and reduce consumption speeds up comprehensively. In the first quarter of 2007, the investment in the fastener industry in China falls by 2.5 from the same period of the previous year, which is the first decrease in the recent years, and is also a mark of fastener industry in China after a fast increase of investment. The decrease of investment in fastener industry indicates that fastener industry in China will develop steadily. Since the period of 2002 and 2006, fastener industry in China increase substantially by 15-18 each year. However, it will keep on growing steadily which is directly correlated with the consumption level of steel in China, the fast increase in automobile industry and the promotion of consumption structure.
Specifically, in this year and in next year, investment will stop being so hot, but it will increase steadily. From January to April this year, the amount of the production and sale will reach 2,600,000. Many key fastener enterprises shift to automobile fastener manufacturing to enlarge their shares of the automobile fastener market, while part of the high strength fastener relies to much on import, as a result of which, small and medium size fastener enterprises obtain too much shares of the market, and the fastener higher than 8.8 degree used by vehicles, machines and machine parts in the market begin to sell like hot cakes. All of these are caused by the fast increase of domestic energy demand, and the inefficient utilization of energy. In developing zones scattered everywhere, businessmen attract investment in large amount, develop processing trade, encourage export, drive the increase of economy by energy and labor in low price, and exploit energy excessively and destructively which makes the resources waste severely and makes the environment pollutes greatly. In recent years, the substantial export in fastener industry in China gives rise to great pressure in several aspects such as domestic resources, energy, capacity and environment. Although the export structure of fastener improves constantly and product of high-grade and high precision increases continuously, the figure shows that fastener export structure in China has obvious weakness. Since the macro-control policy in China will show its effect in 2007, there will be a rigid demand for steel in fastener industry in the whole. Since the last ten day of April, 2007, the price of cold forging rod grows to 100-500 yuan per ton. There is little chance that the price will grow continuously. All of these show fastener enterprise develop blindly and grow hastily which gives rise to too much risk.
The Development Trend of Fastener Industry
In 2007, fastener industry in China draws more attention from the world. It is a long way for the fastener industry in China to go further under the influence of the integration with global economy. In the cluster of fastener products, distinctive private enterprises play an important role. They rely on leading enterprise and adopt OEM policy. They cooperate and compete in special field, and build an industry chain. How to speed up the development? It means that fastener industry in China has the opportunity to grab the adjustment phase of the market to enhance the grade of our products and to strengthen the development of our product so as to become stronger and bigger. At present, fastener industry in China develops to be a cluster of enterprises and tries to obtain more information and provide quality service which is beneficial for the industry to accelerate its development pace. By cluster, we mean the region where fastener enterprises clustered relatively, such as Guangdong, Wenzhou, Ningbo, Jiaxing, Yongnian, Haiyan, Pearl River Delta, and Yangtze River Delta, etc, which gathers the similar enterprises together. Enterprises in these clusters are initiated by local fastener committee to make their competition edge by continuous innovation. In the cluster of fastener products, distinctive private enterprises play an important role. They rely on leading enterprise and adopt OEM policy. They cooperate and compete in special field, and build an industry chain. Since 2005, fastener industry adjusts its strategies. It focuses on the place of origin of the resources to reduce logistics. It takes measures to protect the environment, to improve the raw material, and to control the source of pollution so as to build a professional chain of logistics and supply of material. Some related manufacturing activities are brought into the enterprises. Then let’s move on to the information aspect. With the enlargement of the competition field of fastener industry, the enterprises can obtain more information which is the product of how to utilize and manage the overall resources of the enterprise. The enterprises use ERP computer network to mange logistics, capital flow and information flow of the enterprise in an integrated manner and the core of it is to realize the management of supply chain. At present, the IT technical force of my small and medium size enterprise is rather weak, but the enterprises are considering the introduction of ERP system fully so that they make benefit from the management, because ERP system not only have the functions of producing, dealing with financial affairs and distributing, but also can increase human resources, the feedback concerning after-sale service and quality, equipment management and decision support, etc and can help the enterprises know the demand of the market in time. It supports the enterprise to develop into groups and to operate across countries, the main purpose of which is to allocate and balance the resources of the enterprise fully to make it adapt the integration with global economy, meet the diversification of the demand of the clients, to shorten the period of production, to confront the intense competition, to make the enterprise develop fully its potential in the intense competition, so that the enterprise can make more profit. It shows as the converging of technologies in the features of technology development, which means promote its technology by absorbing the advanced technologies. In the features of product development, it shows as the shift from low degree product to high degree (≥8.8) and high strength fastener connectors. As for the enterprise management, performance quality, product quality, production management and producing schedule gradually develop toward networking. Then we talked about the service. There are a large amount of fastener enterprises. And the enterprises have to take into account the whole process including market research, product development and improvement, manufacturing, sales, after-sale service and recycling, which involves the whole production cycle and displays the spirit of the enterprise to serve the clients and the society comprehensively. With the approaching of globalization economy, fastener enterprises in China, which is the factories of the world, is or is to be transformed as “service industry” and “information industry” in some way.
The Market Forecast of Fastener Manufacturing Industry in China
Fastener manufacturing industry begins to grow steadily, but there are still some weaknesses as follows:
1. The product structure is unreasonable. Low and medium quality products are the leading products in this industry which do not meet the requirement of the resources and the market.
2. The distribution of enterprises is unreasonable. 70% of enterprises in coastal areas are fastener enterprises, which reduces the edge of fastener enterprises, puts more pressure and brings more risks to enterprises of fastener.
3. The allocation of resources is unreasonable. The tension between human resources, energy, material and land resources are rather acute.
How to maintain innovation for traditional fastener industry in China in the Eleventh Five Year Period? According to the 14th National Business Conference of Trade and Technology of Fastener held in Nanjing, leaders and staffs involved in fastener industry and enterprise shall develop to be more professional and to develop to become cluster and enterprise group so as to strengthen the core competition force of the industry. In aspect of professionalization, fastener products usually are in great demand and can be used in various fields, so it shall develop professionally and cooperatively.
Through professional manufacturing in a large amount, the enterprises can make the product better, can save resources and can enhance the efficiency. While the more professional the products, the broader the market. It is predicted by professionals that a batch of fast-growing Chinese enterprises with high efficiency, great innovation and immense strength will emerge around the year 2020 based on professional fastener enterprises of small and medium size. And the best of those enterprises will step into the World 500 enterprises. Then let’s moves on to clustering. At present, fastener enterprises begin to transfer from coastal areas to inland, from regions where the cost is high to regions where the cost is low. For example, fastener enterprises in Ningbo begin to transfer to the nearby places of Xingtai steel company. There is another example. Fastener enterprises in Wenzhou invest the standard industrial park in Wannian Jiangxi together. In this way, the enterprise can reduce the cost of construction, can decrease transportation fees and solve the problem of power shortage.
Then let’s talk about the group of enterprises. Fastener enterprises such as carmakers and enterprises of sets and complete appliance build a strategic partner relationship with reputation, technology and capital as the nexus, which is the development direction of these enterprises. Model based on the globalized operation and new product development becomes mature gradually. Suppliers of automobile fastener have become the pillar of the automobile industry, and the contribution they do usually takes up ten to fifteen percent of the value of the car, or more. The zero stock, JIT manufacturing, integrated delivery of goods of the carmakers requires more from the logistics. In this new era, every enterprise tries to find its innovative value. There is no existing model for fastener enterprises in China to follow. Therefore, we shall reach an agreement concerning the several important issues in the following paragraphs and put them into practice.
(1) When an enterprise wants and tries to be larger and stronger, it is better for the enterprise to focus on "stronger" at first. The enterprise should alter the narrow viewpoint of trying to be larger and ignoring the "stronger"because "larger" without "stronger" cannot make the enterprise keep "larger" in a long run. Only "stronger" can become an enterprise larger and powerful and keep its competition edge in market economy. After several years’ effort, we will make our industries and enterprises become stronger. At the end of the Eleventh Five Year Period, qualitative change will take place.
(2) The edge shall be transferred from price to brand. The export volume of fastener product in China will increase substantially year by year during the Eleventh Five Year Period, thus it is very important for the fastener industry to regulate the export market. In the following 5 years, enterprises shall go on enlarging international market, tries to increase the species and output of the products with middle and high degree or high added value so that the edge is transferred from price to brand. The export enterprises shall strengthen ties between them, make necessary communication and consultation, and seek the independence of the industry so as to avoid out-of-order competition.
(3) Strengthening independent innovation ability. At present, many enterprises in fastener industry in China have made great achievement. As for the whole industry, the innovation awareness of most enterprises is rather weak. They follow their traditional ways and make little achievement. Now, demand in domestic and overseas market grows day by day, and the specific demand changes constantly. The price of fastener product sold to foreign clients is rather low. We have overcapacity in producing product of low degree, so price-cutting competition occurs frequently. Product of medium and high degree is sold at a good price but its capacity is limited and improved rather slowly. To change all of these, we have to strengthen independent innovation ability.
(4) Looking back over the past, in the rapid development period of fastener industry, fastener enterprises own unreasonableness in many aspects, including development thought, project input, growth mode, resource utilization, environment protection, quality assurance, economical operation and enterprise management, etc. Some problems are rather severe, and even harm the survival and development of the enterprise. In the Eleventh Five Year Period, enterprises have to follow the scientific concept of development to change those harmful factors and to build innovative enterprise. This will be the foundation for Chinese fastener industry to become stronger.