Difficulties Faced By China's Packaging And Printing Industry

- May 19, 2017 -

1. The concentration of industry is not high. At present, the first 5 major paper packaging enterprises in the United States market share of more than 70%, Australia's two leading enterprises market share of 90%, and China's top 10 packaging printing enterprises in the market accounted for more than 10%.

2. Equipment investment overheating, overcapacity. The equipment level of some packaging enterprises is relatively high, even in the world leading level, but the equipment utilization rate is low, only reach 60%; some enterprises have to put new equipment in order to meet the requirements of downstream customers, but the equipment is idle after the live parts of the batch have been completed.

3. The cost of manpower has been rising year-by, and it is harder to recruit and keep people. In recent years, because of the increasing cost of living and the change of employment concept, China's low labor cost era has become a history. Enterprises generally respond to the first-line technology workers more and more liquidity, and even the average wages of workers have been rising, the cost of operating enterprises increased significantly. Moreover, with the industry-wide industrial automation and intelligent promotion, the level of enterprise equipment to improve, the use of machinery, professional and technical personnel more shortage, which also hindered the development of High-tech products enterprises. Bangladesh, India, Vietnam and other emerging countries rich in labor resources, abundant natural resources, and the adoption of a series of preferential policies to attract foreign enterprises to invest in some manufacturing to these low-cost countries transfer.

4. The environmental protection policy has put forward the equipment input request to the enterprise's Blowdown control, has increased the enterprise burden. By the end of 2016, 17 provincial areas nationwide had begun to implement the new VOCs sewage charging standard, a trend that would undoubtedly worsen the printing industry. Enterprises blindly carry out the end of governance, often spent energy, material resources, financial resources can not meet the requirements, should be in the source control to consider increasing investment, how to use advanced technology and green environmental protection materials to reduce pollution is the enterprise should consider long-term strategy.

5. Fierce price competition, packaging industry into the era of meager profits. Packaging printing Industry Although the overall development prospects, but due to upstream industries (raw materials), the industry competition and downstream enterprises (customers) three levels of profit squeeze, malicious low-cost competition intensified, began to enter the era of meager profits. The general reaction of the enterprise at present, the profit margin in the live is generally fluctuating in 8%, and some downstream customers are demanding the quality of live parts, and the profit margin is even lower to 5%. I recently heard an entrepreneur say: "The vast majority of failed printing companies do not have orders to do, but pour in the busy production." "Enterprises have to be able to give up, at this point, Guopeng printing is impressive, as a veteran printing company, Guopeng is not as eager to market as other big enterprises, starting from 2007, Guopeng printing on the implementation of the internal ownership reform, and not a penny of bad debts, to do this, there must be" scraping the bone healing, the strong wrist "courage and strength.

6. The relevant standards are too old, leading to the problem of enterprises have no standard can be referenced. Many downstream customers because industry standards are too old and have to set their own enterprise standards, and their own set of enterprise standards too high and limited development, this contradiction is increasingly highlighted.

7. Exchange rate fluctuations have increased the cost of enterprises. The negative impact of the RMB exchange rate on the packaging and printing enterprises, on the one hand, the cost of imported packaging and printing machinery equipment increased, on the other hand, because the upstream paper industry cost increases, resulting in the downstream packaging printing industry costs.

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