Five great risks test the development of the coating industry

Recently we found that some enterprises’ condition of the production and management were not going well,now the coating industry faced with severe situation,and risks are in the making.

Great changes of the coating industry in this year made some coating enterprises cancel the optimistic estimate in the beginning of this year,severe situation also force some companies to develop the technological innovation and capacity expansion to enlarge the market development.Although they gained some results,risks also are breeded.Risks displayed as the following aspects.

Firstly,the market risks increased suddenly.Since this year,some factors stacking such as the inflations of the raw materials’ prices,the increasing production costs,the instensive competitions in the international market,which made the textile industry who has the traits of labor intensivetype and large exports proportion face with big challenges.The decreasing of the textile industry impact on the production and management of the coating industry,oversupply and the market situaiton embrassed the enterprises,the sales gliding with the increasing inventory,and the raw materials’ prices rising substantially,so as the electricity,freight,and salary.These all increased each expense and emermously reduced the industrial profit space.

Secondly,risks emerged in the new products development.Although some main core products of the coating industry remain the high development speed in recent years,everything has its growth limitation, when one reaches its extreme high spot,it starts to walk on the downhill path.As competitions in the market grow increasingly fierce,the life circle of the productions cut short,the new products development seem more important to the enterprises.In the research,some large-scale coating enterprises proceeding the new prodcuts development,however,due to the new products’ own innovationness,it is difficult to success and has high cost,which on the other hand has high risks.What’s more,the new developed products need to go through several tests,whether it can successfully put into the market from the labortory is still a question,At the same time,new products development can be regarded as a complex,dynamic and consecutive course that involved with a series of work such as large amounts of the informatioin collection,analsis, screening and transmitting,selecting and deciding the input and configuration of different kinds of schema,factors and resources,making the new products production and marketing strategy,which existed uncertainty in different levels and might give rise to risks through exploiting.Besides,after being put into the market,the intensive competition in the market and the pressures the products may face with compared to the formor products proposed higher requirements to the enterprises’ marketing strategy and the technology supports whether the products can enter into the market rapidly and enlarge its market share or not.If they fail to play the products’ capacity rapidly,the earning competence of the company would be effected.Several bad results which waste the money and efforts without good benefits made the enterprises do not have lots of confidence in developing the new products.

Thirdly,the capacity expansion still have risks.Under this situation,some coating enterprises adopt to enlarge the scale to dilute the cost and impove the profits.Generally speaking,with the increasing of the cost and the increasing decline rate of total costs, the marginal cost decreased,which can be regarded as scale effects.But when the scale effects reached the best level,increase the output will also increase the cost,so the marginal cost increased.As the results,the coating industry had better control the best level to enlarge scale,when they reached some degrees,they could not enlarge more,or the risks appeared.If the market demands of the relevant products do not increase obviously,the new product capacity can not put into selling,the prospective benefits can not be achieved.And if they can noy achieve the prospective profits,there is no sense to enlarge the capacity.

Forthly the work safety crisis improved.Currently,the chemical industry expansion speed accelerated,the hidden troubles that the new enterprise and new projects bring about because of the shortage of the safety management experience,and other subjective and objective reasons all impact on the chemical industry.So it enters into the security incidents-prone period,the accidents happened continuously which appeared the boosting trend.After entering to 2012,a clue can be seen through frequentemerged safety accidents,the emergency incidents number caused by the chemical products increased apparently which attacted the country’s attention,the government issued "the instructions of the state council Ann council office on further strengthening the safety work of producing dangerous chemicals", although some enterprises focus on this problem and improve the safety production management level,the risks still exsit.

Fifthly risks in energy saving and emission reduction.Currently,with the promoting strengh of theenergy saving and emission reduction,the input to protect environment also increased which has large influence on coating industry.It is going to dead whether you carry on the environment protecting input or not.This cost is not a small number which the small coating enterprises can not afford.The threshold of the enviroment increased which can be regarded as a life and death test for the small enterprises.

In conclusion,as the coating industry,we should foucs on the markey change actively,put the preventation and control at first,strenghen the internal management in the enterprises,take advantage of financing channels and other plus factors,improve the enterprises’ ability to against the crisis and remain the enterprises invincible in the future development.

By Xu Xiyi