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April 04, 2023

Outlook on the competitive landscape of the concrete industry

At present, enterprises producing precast concrete piles in China are mainly located in South China, the Yangtze River Delta region, the Bohai Sea region and economically developed regions such as Jiangxi, Henan and Hubei, with Guangdong, Jiangsu and Zhejiang and Shanghai being the most densely populated regions. In terms of regional layout, the enterprises producing precast concrete piles are mainly distributed in the three more developed economic regions of East China, Central China and South China.

With the further implementation of the national "One Belt, One Road" initiative, the pace of the precast concrete pile industry "going out" is gradually accelerating, some enterprises and groups have invested in overseas (such as Southeast Asia, etc.) to build precast concrete pile production lines, and with the relevant countries of the enterprise The company is cooperating with enterprises in relevant countries to develop the international market. The export volume of domestic precast pile production equipment has also increased significantly.
Cage Pipe Welding Machine are mainly used in construction projects in areas with soft soil geological structure, so pre-stressed concrete pile enterprises in China were first concentrated in the Pearl River Delta region, with the growing market demand for products, product applications continue to expand, and are now widely distributed in the Pearl River Delta region, the Yangtze River Delta, the Bohai Bay region and the major inland lakes (such as Dongting Lake, etc.) region and other provinces, regions and cities, The distribution trajectory of the industry revolves around the coastal and riverine areas. The distribution trajectory of the industry revolves around coastal rivers, lakes and soft land areas.

Due to its large size and weight, Concrete Pole welding machine are currently mainly transported by road, which is limited by the economic radius of transportation and can only cover the market within 150 km of the production base. Therefore, in terms of scale and production capacity, most concrete pipe pile enterprises are still concentrated in Guangdong, Jiangsu, Zhejiang and Shanghai and other regions with a developed construction industry.
Electrical Pole Cage Welding Machine enterprises with first-mover advantages have occupied a large part of the market at the initial development of the industry, and their advantages in terms of scale, technology, capital and human resources are ahead of latecomer enterprises. The advanced enterprises, by virtue of large-scale production, dilute the unit cost, and the economy of scale effect makes their products form a price advantage in the market.
In addition, enterprises with scale advantages in the industry can improve their bargaining power with upstream and downstream enterprises, thus being able to effectively control production costs. The newcomers, due to the small scale of production, are unable to reduce production costs, coupled with a large amount of research and development, equipment investment in the formation of sunk costs, do not have a strong competitive price, in the market competition is very easy to be eliminated.

Due to the large volume and quality of prestressed concrete piles, high transportation costs and the existence of product transportation radius, the product sales market is mainly concentrated in the radiation area around each production base. Enterprises wishing to expand their markets need to set up new production bases in the target markets to reduce transportation costs, with large investments in plants and equipment, which are affected by the industry cycle and difficult to obtain profits in the short term, with a long payback period and high capital barriers.

The national requirements for environmental protection standards in this industry are getting higher and higher, especially the regional governments have successively increased the implementation of the coal-to-gas policy. At the same time in recent years, the state vigorously advocate energy conservation and emission reduction, optimize production capacity to adjust the industrial structure and other related industrial policies, making some regional governments directly on the precast concrete piles for special rectification action, some small-scale enterprises in the industry or because of environmental protection is not up to standard and not timely rectification, or due to the high cost of equipment renewal and transformation and difficult to continue to operate, and finally in the action around the elimination of backward production capacity directly out of the The market for pipe and pile is being driven by national policies.

As a result of these national policies, new barriers to competition were created in the industry, which ultimately led to a further increase in the entry barrier for the industry and a further increase in the market share of the top pipe pile producers in the industry, such as the Company.
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