The scale of the wire and cable industry is gradually emerging, and efficiency improvement has become an industry trend

Update：3/16/2025 2:57:51 PM

At the 2019 China Wire and Cable Industry Conference held by the Wire and Cable Branch of the China Electrical Equipment Industry Association and Shanghai Cable Research Institute Co., Ltd., Wu Shimin of the Wire and Cable Branch of the China Electrical Equipment Industry Association stated that the wire and cable industry has a history of over 300 years of industrial application and is an important guarantee for maintaining the normal operation of modern economy and society. The industry has more than 2000 varieties and specifications involving over 100000, making it one of the largest basic supporting industries. So the wide range of product uses determines its long industrial life cycle.

The cable industry has gradually entered a "mature period", with the growth of industry scale tending to be flat. The annual average growth rate (CAGR) of cable copper conductor production has increased from 12.7% during the 15th Five Year Plan period (2000-2005) to 4.7% during the 13th Five Year Plan period. And overall, the industry's average gross profit has been declining year by year. At present, in the conventional market for large-scale products, there is an increasing display of specialized economies of scale and efficiency advantages. The competition of "small but comprehensive" and "medium but comprehensive" has become increasingly difficult to compete with the high efficiency and low cost of specialized scale products. The future manufacturing landscape will further reflect a specialization trend based on efficiency.

The current trend is that large enterprises have begun to dominate the market, and the industrial scale is gradually stabilizing. As the industry gradually enters a mature stage of development, the intensity of industrial capital will gradually increase, providing convenience, possibility, and more favorable conditions for large companies to enter markets with higher concentration and engage in higher technological innovation. This also gradually improves the efficiency of the entire industry, but at the same time, it also brings obstacles to innovation activities in the financial market for small and medium-sized enterprises.

So in order to better cope with more changes during the maturity period, enterprises have also introduced various coping strategies, including industry chain layout based on the industry chain, in order to gain overall competitive advantage. And it also focuses on exploring potential markets, promoting enterprise development through investment in new construction, mergers and acquisitions, external investment, expanding domestic business coverage, and fully leveraging the resource advantages of both domestic and foreign markets. At the same time, technology export is regarded as an important way to effectively promote technological innovation, improve the efficiency and output of technological innovation.

At the same time, enterprises should seize the opportunity to carry out low-cost expansion in order to diversify their expansion methods, no longer limited to self built projects or expanding production. Taking advantage of the current industry situation, integration activities for low-cost expansion through acquisitions, mergers, or equity participation are also becoming active.

Enterprises should also pay attention to high-quality development, which is currently the trend of China's economic and social development, as well as the current trend of the cable industry.

Enterprises need to continuously improve their efficiency, and the most competitive enterprises in the future will need to be among the top in the industry in terms of efficiency.

Technological innovation and process innovation also play an important role, relying on continuous technological innovation to bring new growth points to enterprises. In recent years, when the performance competition of new products has shifted to price, the importance of process innovation has once again been reflected. In the current market environment where growth is slowing down, companies that can survive by exceeding the industry average growth mainly rely on their internal cost capability.

At the same time, it is necessary to pursue the maximization of marginal benefits, as the resources of enterprises are limited and they need to constantly overcome bottleneck obstacles and dynamically adjust and optimize.

Wu Shimin expressed confidence in the development of the industry at this stage. Although the usage of electricity has been decreasing in recent years, due to China's huge population base, the market for wires and cables will still have a relatively good growth trend in the future.