Factors restricting the development of the cable industry

The cable industry has developed to now, and the overall size is very large, with a large number of companies. China has surpassed the United States to become the world’s largest cable manufacturer. However, in this rapid development process, many problems have gradually been exposed.
The first problem is that there are few large domestic cable companies, and they lack competitiveness with foreign cable companies in high-end products. Even in 2018 or so, the annual output value of the top ten companies in  ACSR cable production scale is not as good as the total output value of the industry. 20% of the total, which is in sharp contrast with developed countries. However, it is roughly the same as my country’s current economic structure, and it is basically the same as that of other industries.

The second problem is that the homogeneity of products is serious and the market competition is fierce. There are a large number of cable companies in China, most of which are small and medium-sized enterprises. The operation mode, management and technical level of these companies present serious homogeneity problems. The problem of homogenization has aggravated overcapacity. In a homogeneous product market, users are mainly concerned with price, and competition is almost entirely concentrated on price. The greater the surplus of homogenized production capacity, the fiercer the price competition, the thinner the profit, and the more difficult it is for a company to survive.

The third problem is that the pressure of funds is huge. The xlpe cable industry is a typical heavy-material and light-industry industry and a capital-intensive industry. Therefore, the cable industry is always facing the pressure of the capital chain. The most significant phenomenon is the application of many companies. The total amount of money collected accounts for a high percentage of annual revenue, many of which are 30%. This also leads to financial difficulties for companies, and China’s cable industry is mostly small and medium-sized enterprises, so these companies are generally facing financial pressures. The problems of difficult financing, expensive financing, and high financing costs have sharply increased the risks in the capital chain of enterprises. In the past two years, due to the tightening of the entire financial system, many companies have found it difficult to cope and shut down and revert.