Analysis: raw material costs soared to become a weakness in coatings companies

In the first year of 2011, almost a barrel price rose by 20-30 yuan, and these raw materials such as titanium dioxide are rising. If the paint price does not increase, then only losses will occur. On March 1st, Chen Hui, a person working for Jimei Home Paint and Building Materials Factory, gave his name to the author.

In the afternoon of March 1, the author visited the Beijing building materials market and the Beijing Paint Factory and found that the price of raw materials such as interior wall paint and exterior wall paint, such as paint, building materials, cement, and resin powder, has been rising all the way. It has a high international oil price. .

Data from the National Bureau of Statistics shows that in January 2011, the ex-factory price of industrial producers nationwide rose by 0.9% from the previous month and was up 6.6% from the same month of 2010; the purchase price of industrial producers rose by 1.2% from the previous month and was up from the same month of 2010. At 9.7%, the gains have all increased. Among them, the raw material industry price rose by 1.3% and the processing industry price rose by 0.7%.

With the gradual introduction of the state's real estate control policy, the prices of industrial products centered on coatings and building materials have risen by 10%. According to industry analysts, rising prices of industrial necessities will become a new round of inflationary pressures faced by the Chinese economy following the rise in the prices of food and consumer goods. Many manufacturers have stated that the increase in raw material costs will become a weakness in corporate development.

Increase in raw material costs

Paint market profit is getting smaller and smaller, like this bucket of 5 liters Dabao paint, now priced at 400 yuan, and during the event, customers buy paint to send primer, a bucket of paint profit is only 30 yuan, remove the storefront, rent And so on, there is only 5 yuan of profit space in the end.' Jimei Home Coatings City Chen Hui told the author.

In the actual investigation, the author found that the profit space is shrinking and the cost is increasing day by day. It has become the status quo of the survival of industrial necessities enterprises. Take the Beijing paint market as an example. Everyone knows that the prices of their raw materials such as solvent materials, titanium dioxide, rosin, emulsions, and auxiliaries are closely related to the trend of oil prices, whether they are exterior wall paints or interior wall paints. With the recent sharp rise in international oil prices, the prices of these raw materials have risen correspondingly.

Statistics from the National Bureau of Statistics on industrial product prices in January showed that the ex-factory prices of crude oil rose by 5.4% from the previous month, and the prices of gasoline, diesel, and kerosene in refined products rose by 3.2%, 3.3%, and 4.0% respectively. In the price of chemical products, the price of butadiene rubber rose by 3.9%, and the price of polystyrene foam rose by 2.3%.

Now the price of paint is almost 10%, and the price of a 5 litre bucket of paint has risen by 30-40 yuan compared with the original, and it is still more appropriate to buy now because these goods are basically inventories. Prices increase, the future price increase of finished products may be higher, said Chen Hui.

At the same time, Chen Hui also introduced that from the beginning of the year, with the increase in crude oil prices, their transportation costs have now risen by 6% over 2010, mainly due to the increase in oil prices, plus the cold weather since the Chinese New Year, and paint transportation must be guaranteed. A certain temperature, which adds up to a total cost increase of 20% more than the original, if the original 10,000 of the goods, it will now pay an additional cost of nearly 2,000 yuan, if the profit margin is not almost zero.

Now the main price increase is the coating, building materials, cotton and other industrial necessities, the extent of almost 30% or so, then after some raw material prices, the company's production costs will increase directly, if the downstream market demand has not kept up, corporate profitability will be A sharp reduction in the analysis of Xu Suiqi, a senior engineer in industrial products research.

According to the website of the China Association of Industrial Products, in fact, as early as in the first half of 2010, the prices of raw materials for coatings have risen, and consumers and paint manufacturers have begun to play games, thinking each other about reasonable prices in the market. However, since 2011, with the rising cost of raw materials, after half a year's fermentation stage, the price of the paint market has finally missed, and the flood discharge has finally opened.

Xi Zhi Guodu Securities analyst Zhu Zhiping said in an interview with the author: 'PPI industrial product ex-factory price index continued to be higher than 5% from 10 in 2010, an increase of 6.6% in January 2011, continuing to operate at high levels'. International crude oil prices have risen sharply, which in turn has driven up the prices of basic raw materials such as olefins and aromatics. Chemicals prices are expected to continue rising. In the short term, corporate profits are expected to benefit from low-cost raw materials or finished product inventories, but such positive impacts are only phased. The tangible increase in corporate profits still depends on the substantial increase in demand.

End market demand declines

At the time of renovation, the project price is 30,000. Now the paint price has risen by 10% from the previous year. The original resin powder for a bag is 12 yuan, and now it has risen to 13-14 yuan. In this way, the decoration cost is estimated to rise to 4 Ten thousand yuan. Zhang Liang, who just finished decorating the house, said to the writer.

According to reports, Zhang Liang, who is about to get married in May 2011, has a 80-square-meter house near the Wukesong Subway. He started renovations in September 2010. At that time, the budget was 30,000, but with the coating, building materials, and flooring, The price of 1-50 yuan for decoration materials such as cement and sand increased by an average of 10%. At the end of February, when the project was closed, the calculated amount had risen to 40,000 yuan. The increase of 10,000 yuan is still a big expense for Zhang Liang, the working class.

However, because of rigid demand, the only option is to renovate now. The next stage is to start preparations for the wedding. If there is no pressure on the wedding room, Zhang Liang said: 'Should not choose to renovate the house at this time, wait and see if the price If you keep going high, you will be staggered in time.'

During the interview, the author also found that raw material price increase may be a one-off behavior for Zhang Liang. After the renovation is completed, he will not pay attention at least in the short term. However, for decoration companies that always deal with the market, it is related to the entire project. Budget news.

Qu Wei, head of Beijing Haifafa Decoration Company, explained to the author that on March 23, he had just received a notice from the building materials company, saying that raw materials such as cement, resin powder and paint began to have a price increase of around 10% from next month. Speaking of news of price increases, Qu Wei frowned. He gave an example of his image; 'If you decorate an 80-square-meter house, including paints, lamps, floors, sanitary ware, etc., you need to increase the cost by 5,000 yuan more than the original price increase, and it does not include Workers' wages'.

In addition to the increase in the cost of purchasing raw materials, the wages of decorators are gradually increasing. Qu Wei said that in May 2010, the salary of a tile worker was 150/day, but it has now been raised to 180/day. This way, a worker will pay almost 1,000 yuan more, including overtime pay, a month. If the price of raw materials keeps rising, we can only increase the price, but it may also be counterproductive and lose customers. Therefore, the number of projects in 2011 will be nearly half compared with that in 2010. If prices continue to rise, there will be fewer people to decorate. Can only rest at home, can not do money business.

In the survey, after visiting several decoration companies, the authors stated that the current form of the decoration market is not optimistic. On the one hand, with the state’s control over real estate policies, most people who buy a house have a wait-and-see attitude, and the pressure on working-class buyers is greater. With regard to the increase in raw materials, the number of people refurbished is relatively reduced unless there are some rigid demands. Compared with 2010, the proportion of renovation projects they received in 2011 dropped by about 15%.

Innovation is the root of development

The purchasing costs of the upstream market have increased, and the downstream market has been in short supply. Such severe forms of inflation have cast a shadow on coatings and building materials companies, especially small and medium-sized enterprises, lagging production technologies, meager profits, and unfavorable market factors. Bring unprecedented competitive pressure to the company.

Although some companies have a certain inventory, they can maintain a certain market operation, but compared with large state-owned enterprises, the inventory of these enterprises can only be maintained for one month, the short-term terminal market demand is reduced, can not support the development of enterprises, only take the innovation The road can break through the difficulties. Xu Shouqi, a senior engineer in industrial products research, said.

In response, Zhu Zhiping, a senior analyst at Xi'an Guodu Securities, said: 'The company can only maintain a stable trend by focusing on energy conservation and consumption reduction and reducing raw material and energy consumption to ease the cost pressure brought about by rising resource prices. . At the same time, the government should give appropriate subsidies to encourage enterprises to purchase energy-saving equipment to achieve the purpose of reducing energy consumption. '

At the same time, he suggested that some small and medium-sized enterprises with poor competitive advantages could consider switching their development ideas, respond to the country’s development plan for the promotion of emerging industries in recent years, withdraw from the original price war, and strengthen the cultivation of core corporate competitiveness. Research new industries, new technologies, and strengthen and expand in the industry segmentation industry to further expand the company's development space.

Under such circumstances, the phenomenon of “high-income and low-income” of the downstream enterprises has intensified, and the production cost of the enterprises has increased, and the factory and purchase have caused serious 'upside down' compared to the same period of last year. If the phenomenon of 'high in and low out' persists, it will certainly increase the production cost of enterprises, resulting in the continuous squeeze of corporate profits, which will have a more serious negative impact on the improvement of corporate profits.