Metallurgy / Chemicals / Rubber & Plastics

A few days ago, the State Council held a national teleconference on stabilizing the economy and pointed out that "in March, especially since April, some economic indicators have fallen significantly, and the difficulties in some aspects and to a certain extent are greater than when the epidemic was severely impacted in 2020." . The relevant person in charge said that in April 2022, the liquidation of enterprises nationwide soared by more than 23% year-on-year.

According to the data of the Qichacha platform, since 2022, a total of 5,984 plastics companies have closed down, cancelled, bankrupt and reorganized, of which 4,425 have been established and cancelled this year, and the remaining 1,559 have been established for various lengths of time and are currently being cancelled. or has closed down. These enterprises cover many major plastic provinces such as Guangdong, Zhejiang, Jiangsu, Shandong, Henan, Anhui, etc. The business scope ranges from the processing of recycled pellets to the manufacture and sales of plastic products. The registered capital is as small as 20,000 yuan and as large as 50 million yuan. Yuan.

A comprehensive analysis of the reasons for the large number of cancellations and closures of plastics companies mainly includes the following points:

The price of upstream raw materials continues to rise, and the order volume of small and medium-sized enterprises continues to decline

In the first half of this year, the outbreak of the epidemic in Shanghai and other places made it difficult for many enterprises to continue. On the one hand, the global shortage of crude oil supply has led to rising prices of upstream raw materials. Whether it is PVC, EVA, POM, or commonly used PP, PE, and ABS, prices have opened the valve. In addition, the labor costs and operational costs brought about by the epidemic containment. Costs, transportation costs, and hard expenses all make it hard for companies to guard against them; on the other hand, according to relevant data, about 73.8% of small and micro enterprises have seen a decline in their corporate order volume and have not yet recovered to pre-epidemic levels. Small and medium-sized enterprises hoard a large amount of goods in warehouses, which cannot be realized; the registration and cancellation ratio of small and micro enterprises continues to decline, the number of registrations drops sharply, and the number of cancellations surges. Over 10% of small and micro enterprises have disappeared, and only 35% of small and micro enterprises can be confirmed as normal operations. With the unblocking of Shanghai, the demand will gradually be released, but it is too late for some small and micro enterprises. It is difficult to receive orders and the cost is high, but at the same time, wages and rent must be paid continuously. Small and micro enterprises in the epidemic are caught in the gaps to survive.

EIA is difficult to criticize and affects corporate financing

In recent years, my country's environmental protection requirements have become higher and higher, and environmental protection inspectors have become increasingly stringent. As a highly polluting and energy-intensive industry, plastics have been greatly affected. Many companies have been unable to pass the EIA. This impact also includes difficulty in obtaining financing from financial institutions such as banks, and even direct rectification and shutdown.

Small and medium-sized enterprises have the problem of financing difficulties in operation. Banks see that the scale of small and medium-sized enterprises is not large, and they do not have any heavy assets as collateral, and they do not dare to lend to small and medium-sized enterprises. Some small and medium-sized enterprises can only borrow money from underground banks or small loan companies, but they cannot bear the high interest of these financial institutions, so they have to declare bankruptcy.

Low market concentration and intense homogenization competition

The market and production capacity concentration of plastic enterprises is relatively low. In 2020, the CR3 of my country's plastic packaging industry is only 4.33%, and the CR5 is only 4.99%. Therefore, the vast majority of enterprises are small in scale and weak in competitiveness. Although the pace of structural adjustment in the industry is accelerating, the current plastic parts market is still dominated by small and medium-sized enterprises, and the core competitiveness of products is not strong. (Note: CR3 refers to the market share of the top three companies by business scale or the top three companies by business scale; CR5 refers to the market share of the top five companies by business scale or the top five companies by business scale .CR is the abbreviation of English concentration rate, which means "concentration".)

The plastic packaging industry is an industry with a very low entry threshold, which leads to everyone rushing to this industry. In the case that the products have no features and no advantages, the homogenization competition is too fierce, the profits are more and more diluted, and it is difficult to survive for a long time. .

Nearly 6,000 plastics companies closed down, mainly due to the impact of the epidemic. However, the difficulties of environmental assessment, the pressure of goods and loans, the cost of artificial rent, water and electricity, malicious low-price competition, and the broken capital chain have also made the survival of small and micro enterprises worse. Under the epidemic, how to survive this difficult time has become the focus of plastic manufacturers. In the past two weeks, the epidemic in Shanghai has been repeated again and again. People in the plastics industry continue to come and go, but not many are left. Under many difficulties, no one can predict which will come first tomorrow or cancel.