Keywords: tool, Tool industry analysis|2019-10-10 11:00:28|Source: China Machine Tool Industry Association
Recently, according to the work plan of the Media Processing Industry Association of China, the author interviewed the tool branch secretariat and several tool companies (main tool companies) in the form of interviews and correspondence, which has a bearing on the operation of China's small tool industry and the current situation of the company. Initial understanding, form some rough understanding, simple summary as follows.
I. Industry and company profile
It is understood that 2017 is a rare good year in the history of the tool industry. For four consecutive quarters, the development momentum of production and sales has been maintained. Sales revenue has increased by more than 20% year-on-year, and exports have also hit new highs in recent years. In 2018, the tool industry first continued its rapid growth in 2017 and continued to maintain rapid growth. However, with the gradual decline of 3C and the automotive industry, the growth of the tool industry (mainly small tool industry) has slowed down since the second half of 2018. In the first half of 2019, the tool industry showed a high level of consolidation, which was stable and declining. According to the data of 40 member companies participating in the monthly report, the sales revenue of 4, 5, 6, 7, and 8 months increased by -3.3%, -3.4%, -4.4%, and -6.7%, respectively. -8.1%, sales revenue increased by -5.2%, -10.4%, -4.6%, -19.3% and 2.7%, respectively, and profit growth was -9.9%, -14.4%, -6.5%, -8.8% and - respectively. 10%, downward pressure increased month by month. At the same time, the export of cutting tool products in the first quarter of 2019 also dropped sharply, with a year-on-year increase of -15.2%. In view of the overall situation of the machine tool industry, the decline of the tool industry, especially the small tool industry, is highly correlated with the big environment and slightly lagging behind, and is more affected by the significant decline in the user sectors such as automobiles and 3C.
Specific to the enterprise level, the situation is different.
According to the statistics of China Machine Tool Industry Association, in recent years, Shanghai Tool Works Co., Ltd. (referred to as Shanggong) has a good overall operation, and the total annual sales and total profit are at a relatively good level. From the data from January to May 2019, the sales of high-speed steel twist drills, high-speed steel wire cones and solid carbide tools of Shanggong have declined to some extent, but they insist on technological innovation and structural adjustment, and in construction machinery and aviation. Aerospace and other fields performed well, and the total profit of its products increased by 10.5% year-on-year. In the first half of 2019, Zhuzhou Diamond Cutting Tool Co., Ltd. (referred to as Zhuzhou Diamond or Zhuzhu) saw a slight decline in domestic and foreign sales, but through positive adjustment of market strategy, sales in May rebounded from the previous month, and the decline was narrowed year-on-year. The downward trend of marketing was effectively suppressed. . The output of Guilin Guanglu Digital Measurement & Control Co., Ltd. (referred to as Guilin Guanglu or Guanglu) decreased slightly by 1%, sales increased by 15% (including 30% in the first quarter), and the second quarter began to feel a serious decline in orders, second Quarterly sales were the same as last year, which is rare in Guanglu for nearly three or four years. Sentai Yingge (Chengdu) CNC Tool Co., Ltd. (Shentai Yingge) was in good condition in the first half of 2019, with a total production value of about 120 million yuan, a year-on-year increase of 21%; the newly signed contract was about 83 million yuan, a year-on-year increase of 16%. . Hangzhou Hangdao Tools Co., Ltd. (including Hangzhou Hanggong Tools Co., Ltd., referred to as Hangdao) produced stable growth in the first half of 2019, and basically balanced production and sales. The output of taps, dies and sets of cutting tools increased rapidly. Xiamen Golden Heron Special Alloy Co., Ltd. (referred to as Jinlu or Xiamen Golden Heron) reflects that the growth rate of order demand has slowed down compared with 2018, but it is still in normal operation. Zhejiang Xinxing Tools Co., Ltd. sales growth of 35.1% in the first half of the year, exports increased by 41.1%, production and sales increased rapidly.
In the first half of 2019, tool companies were more or less affected by Sino-US trade frictions. Zhuzhou Diamond is the one that has a direct impact. First, a 25% increase in tariffs has increased the cost of exporting and marketing tools, which has weakened competitiveness in the US market. Secondly, the current tax collection list includes a large number of tool application industries, such as engines and motors, which will indirectly cause a significant decline in the export of related products. In addition, some user companies may consider moving their production lines from China to countries such as Vietnam and ASEAN, resulting in shrinking demand for tools. If the United States further implements a 25% tariff increase on 3C industries such as mobile phones and tablet PCs, it will cause a greater decline in tool demand in related industries. The Sino-US trade friction has had a large indirect impact on Guanglu, and the overall decline in tool orders has been caused by the impact of its service sector. Hang Blade Tools also said that Sino-US trade friction caused its orders in the foreign market, especially the US market, to become unstable in the first half of 2019. It is expected that US customers will significantly reduce orders in the second half of the year and demand price cuts, which will impact their export markets.
From the feedback of enterprises, the demand for tools in different fields and the market performance of different tool varieties vary widely, fully reflecting the specific and subdivided characteristics of the tool industry. At present, the fields with good demand for tool products mainly include aerospace, military, energy, engineering machinery, rail transit, heavy machinery industry and so on. Shanggong said that with the country's emphasis on national defense and aerospace industry, the aerospace industry will become another area of development after the automotive field. In particular, in the field of aerospace parts processing, it has almost become the point of origin of various tool manufacturers at home and abroad, and has launched a series of aviation-specific tools. Although the overall scale effect of aviation is not enough at present, as the various tool manufacturers have not entered the formal application system, the market still needs a cultivation process, but the development potential is huge. At the same time, in the past two years, the development of general machinery such as construction machinery and rail transit has been relatively good. The heavy machinery industry has ushered in a new round of economic upswing, and the demand for new kinetic energy has continued to accelerate. Among them, the metallurgical industry, mining, etc., continued to heat up in 2018, and maintained a growth trend in the first half of 2019.
In terms of the types of tools, in general, the market demand for high-end series products with high technical content and can replace imports is relatively strong, and orders are better. Different types of tools vary from company to company. The new products such as the economical hydraulic shank, quick-change bonding chuck and high-efficiency reaming system introduced by Sentai Yingge in 2019 have won high praise from the market and drove sales growth. The taps, dies and sets of cutting tools of the Hang Blade tool have grown faster than the previous year. Guanglu's micrometer varieties and vernier calipers are in full supply and are in short supply.
Second, the main problems and difficulties exist
The volume is small and the degree of attention is insufficient. Due to the small size of the tool industry, the market size is only tens of billions, and even less than the annual marketing revenue of individual companies in certain fields. For a long time, it has been regarded as a subsidiary of machine tools, and has not received enough attention. The strength needs to be strengthened. Insufficient investment in basic industry research and product research and development, the mid-to-high-end market has long been occupied by brands such as Europe, America, Japan and South Korea, and it is difficult for national products to make major breakthroughs. In fact, as an important part of the cutting process, the tool directly affects the level of machining, which is one of the important factors to measure the manufacturing level of a country.
The talent problem is outstanding. The talent problem is a common problem in China's machine tool industry and even the entire machinery manufacturing industry. It has seriously restricted the overall progress and development of the industry. Zhuzhou Diamond believes that the domestic tool industry started late and the foundation is thin. The development process in just a few decades is far from sufficient in terms of technology precipitation and talent reserve. Sentai Yingge said that the most important problem facing enterprises is the shortage and loss of high-end technical talents. Xiamen Golden Heron believes that the tool industry has a large demand for professional and technical talents and management talents, but it is difficult to recruit at present. Guanglu reflects that the company is located in an underdeveloped area like Guangxi, and the overall wage level is not high. It is difficult to recruit high-end R&D talents, and this problem is currently difficult to alleviate.
Some companies report limited capital investment. The work shows that as the prices of raw materials in upstream products continue to rise, the production costs of products continue to increase and product exports are affected. At the same time, due to the slowdown in capital turnover, the market demand has declined, and customer inventories have continued to rise. The overall market situation is not optimistic. Guanglu also encountered financial problems, mainly due to fierce competition from peers, low product profit, and due to the small volume of the measurement market, slow growth rate, lack of policy and financial support, and limited investment by the company's own funds, unable to speed up technology. The pace of innovation and product innovation. Enterprises such as Xiamen Golden Heron also reflected the problem of rising operating costs and high cash flow pressure.
In addition, some companies have reported that environmental pressures are growing. For example, Shanggong is located in the international metropolis of Shanghai, but it is mainly based on traditional manufacturing. How to ensure that the production process meets environmental protection requirements and ensure that production capacity is not affected or less affected is a relatively difficult problem for enterprises.
Third, strive to transform and meet the needs of the middle and high-end market
Similar to the entire machine tool industry, most of the high-end markets in China's tool industry are occupied by imported brands. According to the Secretariat of the Machine Tool Association Tool Subcommittee, among the total consumption of 42.1 billion tools in China in 2018, imported knives (including overseas brands produced and sold in China) accounted for 14.8 billion, accounting for 35%. Faced with the increasing pressure from 2019 and beyond, tool companies are striving to explore the path of transformation and upgrading.
Breakthrough in key areas: For the current economic situation, Zhuzhou Diamond believes that the macro economy will still be under downward pressure. Under the influence of many factors such as Sino-US trade friction, the cutting tool industry will continue to fall in the second half of the year. Zhuzhou Diamond will continue to take proactive measures to cope with changes in the market situation. On the one hand, it will continue to strengthen market promotion efforts in the second half of the year, deepen the key application market and increase market share; on the other hand, continue to aerospace, military, automotive, energy, etc. Special high-end tools in key industries will carry out special research and development, further expand the market, and strive to break through more foreign technical barriers, occupying a larger share in the middle and high-end cutting tool market.
Shanggong has carried out a lot of research on China's aviation manufacturing industry, which is in a period of rapid development. It points out that the development of new aircraft and large aircraft poses challenges for aviation manufacturing and processing, and puts higher demands on the overall application of tools. From the point of view of the machine being processed, the required tools can be subdivided into machining tools such as engine, wing, fuselage, and landing gear. The machining of the engine can also be divided into gates, blades, leaf discs, diffusers, and bearing shells. Body and so on. From the perspective of different materials to be processed, it can be subdivided into special tools for processing different materials such as HRSA high temperature heat resistant alloy, aluminum alloy, titanium alloy, carbon fiber reinforced plastic and high alloy steel. From the tool type, it can be subdivided into an overall high-speed steel tool, a solid carbide tool, an indexable tool, and a PCD welding tool. According to statistics, in the field of aircraft manufacturing, high-speed steel tools account for about 60% of all types of cutting tools, carbide tools account for about 35% of the total tool, superhard tools (cubic boron nitride, diamond) accounted for The total amount of all tools does not exceed 5%. This has great development space for the work of the high-speed steel tool design, manufacturing and application, but the overall supporting capacity of the tool needs to be further improved.
Targeting the mid-to-high-end market: Guanglu will increase the research and development of high-end series products based on the original product series, aim at international high-end similar products and compete with international high-end technology. The target market is advanced port replacement, and then develop international high-end. market. Guanglu said that it will unswervingly take the high-end line and take technology R&D as a pioneer to consolidate the company's basic strength and create higher value for customers. Hang Blade Tools said it will pay more attention to the export market, pay attention to the impact of Sino-US trade friction, adjust product layout in time, and further expand markets in Europe and Southeast Asia. At the same time, improve product quality, increase technical innovation and production scale investment, promote and improve digital and 8S management.
Broaden the user domain. For the development strategy and prospects for the second half of 2019, Sentai Yingge said that the decline of the automobile manufacturing industry in the first half of the year has affected the growth expectation to some extent, and will increase the strength of the user sector in the second half of the year, targeting the energy power industry and construction machinery. Key industries such as electronics and aerospace are deployed; at the same time, it is necessary to meet the requirements of more automobile manufacturing enterprises to reduce costs and increase efficiency, and to improve the quality and stability of products; in the next few years, we will strive to enhance our own strength and consolidate Foundation, seize the opportunity, stand out in the wave of transformation and upgrading.
Shanggong believes that in the field of construction machinery and rail transportation, the demand for traditional tools, especially large-size tools, has increased, such as large-size high-speed steel drill bits, large-size spiral groove taps above M36, and solid carbide internal cooling. Deep hole twist drills and other products, market demand has increased. For the future development prospects of the industry, the respondents can rationally view the current situation and future trends, and have full confidence and expectation for the state's supportive entities, tax reduction and fee reduction policies. At the same time, it said that it will actively adopt practical and feasible measures to improve product technology and quality, strengthen management, promote integration of the two industries, participate in informatization construction, and change the influence of Sino-US trade frictions into passive measures for its own characteristics and industry situation. Take the initiative to better develop domestically produced knives, strive to achieve import substitution, and make greater contributions to the revitalization of the machine tool industry.
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