Due to the wire and cable industry profits decline the volatility of copper and aluminum prices
At present, all kinds of wire and cable manufacturing enterprises in China reached more than 7000, the scale of production industry disorderly expansion, equipment utilization rate of less than half, falling profits, many enterprises capital preservation or operating profit. In addition, the price of copper, aluminum and other raw materials of the huge fluctuation is the main reason causing the wire and cable industry average profit margins decline.
It is understood, raw materials prices rose 5%, the relative profit will reduce 4%. Therefore, the beginning of 2007 to the first half of 2008 with the wire and cable industry raw material prices continue to go up, a large number of enterprises to purchase raw materials such as copper and aluminum. But the financial crisis of the commodity and non-ferrous metal prices all the way down, and the influence of export, causes the enterprise to set high conservation of raw materials in a short time is difficult to digest, enterprise funds chain tight.
At the same time, the cable industry of fake and shoddy phenomenon is very serious, inferior wire and cable filled with murky market, non - standard products also lvjinbujue. The added value of the product marketing management mode is low, product homogenization serious, low-priced competition intensified, the lack of brand leadership, extensive is the fact that does not dispute.
In the choice of wire and cable products and the signing of the contract, all layers of threshold setting, let the cable companies into inextricably bogged down in whirlpool. According to industry sources, the disadvantages of three is not conducive to enterprise general cable in cable industry supply and marketing contracts: one is the contract, due to various reasons (such as the financial crisis to cancel the order, the termination of the contract), failed to perform, lead wire and cable enterprises supply large backlog, caused huge losses. The two is the cable supply contract, use the "word of the contract", this kind of contract, the demand side does not bear any risk of raw material prices. (due to the characteristics, the production of wire and cable manufacturing enterprises from bidding, bid, to the organization of raw material, production and delivery, cycle is approximately 1 to 2 months to 24 months. Because of the time too long, during the material price risk is any enterprise can not afford. Three) is the mode of payment is not reasonable, at present domestic still generally use the "1 - 8 - 1" payment, even with the "1 - 4 - 4 - 1", which adds an additional difficulty for cable enterprise floating capital turnover.
The contract inequality, method of payment is not reasonable, coupled with raw material fluctuation range is too large, resulting in the original technical content is not high, "material overwhelmed heavy light" cable enterprises with low added value, liquidity greatly diminished, come to a deadlock the financial situation of enterprises.
At this time, a lot of enterprises focus to marketing work, hope that through the change of marketing mode and strategy to improve the performance of enterprises, so that the profitability of the business has greatly improved. But many enterprises have not to formulate relevant sales strategy and mode according to the actual situation and characteristics of their own, causes the enterprise to go more detours, business costs did not fall but rise.