Monday, December 13, 2010

Floor heating industry turn towards new development manufacturers small profits but quick turnover of survival

Warm main materials for floor heating pipe, diversity of water and heat insulation layer, under floor heating industry chain "upstream" and "River" and "downstream" classification, Korea LG chemical and Hunan petrochemical raw material supply pipes such as enterprises belong to the "upstream" enterprise, tubing, fasteners, water separator, thermostat etc materials manufacturer is River construction enterprise, floor heating in the lower reaches of the industry chain.

As the marketing effectiveness of presentation, floor heating in some areas has entered the mainstream heating with pride. But in the local market, market expansion is far from and industry capacity expansion. Driven by the interests, some operators are excessive pursuit of low prices, resulting in a decline in the quality of products, a large number of small plants rapidly implemented, three or even no products in the market, neither guarantee nor a service guarantee, but only short-term profit, make formal quality assurance of qualified products, manufacturers are not reasonable price and their market share. These phenomena cause heating industry in local areas, levels and vicious competition, threats to a formal manufacturers profit, therefore, to warm the industry profit rate increasingly meager is one of the industry development and resistance.

Floor heating industry material manufacturers: small profits but quick turnover of survival

Pipe business in materials manufacturer is representative, it was learned that their profits are able to maintain the 3 per cent to 5 per cent is very good. Although the best profit margin should be at the 6 per cent, but now most companies can achieve. For floor heating pipe manufacturer, if he can not get 6% of profits may means that enterprises do not have enough funds to support research and development, brand building, after-sales service, etc. The lower the rate of profit, the enterprise often rely on "zouliang" to survive. While profit long-term low, so a lot of floor heating pipe business quite a headache. In raw material prices rise higher, floor heating industry material manufacturers are difficult to do. Especially for large enterprises, if the upgrade price, number of small manufacturers will use fakes expeditious seize market; if you do not mention the price, can only be those in lower profit.

Not only is the tube and fasteners, water separator and thermostat, and other ancillary products also relies on the principle of survival. Of course, in this downturn situation, I still have some warm products with high technology content, or the brand effect get higher profits.

Floor heating industry construction enterprises: high risk of "profit"

Compared with warm materials manufacturers, to warm the construction enterprises of profit is relatively high, but could not be ignored is the so-called high-margin behind the enormous risks and pressures. For floor heating companies, profit is directly proportional to the risk. Because the construction enterprises in the construction, quality, debugging, maintenance and so on each link has a large number of issues that need to be faced. Moreover, not all heating construction enterprise profits are high, typically larger companies in the gross profit margin will be higher, but the net interest rate is very low, they have huge amounts of management costs, sales and service system, so it has been suggested that these so-called return to warm the enterprise is in fact a virtual profit.

According to reports in heating technology extension time, market maturity, the higher the Northeast and North China, due to market competition, to warm the construction enterprises of profit margin generally 10% ~ 15%, in the Northwest Territories this ratio can reach 15% ~ 25%, while in still in warm market import phase of the traditional non-heating zone profits can even reach 40 per cent. But it is important to note that in these regions, construction enterprises must also assume a higher than other areas of the promotion costs. At the same time, although some areas of higher profit margins, the margin is limited to single projects, warm companies cannot achieve projects market maturity level of region can achieve level. In other words, in the local area, construction prices maturity is low, but the larger the total amount of engineering; and is still in the market, import phase of the region, although some relatively high prices, but was unable to get the total amount.

According to the industry, for heating industry profits, should a change in rationally. Floor heating in some areas already spent market import period into the relatively mature stage in this process, industry profits and market changes is directly proportional to the gentle, so profits decline is normal. In this sense, seizes go to warm the industry profits, not any one enterprise, which is the "market" the invisible hand. Of course, the current market price of dramatic decline, especially due to the vicious competition caused drastic price, peer hawks behavior is quite good, must be vigilant. Floor heating industry in the development process, both opportunities and challenges, each stage of development, competition and challenges are different. At this stage, the floor heating one needs more rational and wisdom to create the core competitiveness of enterprises, accelerated warming to the company's large-scale and industrialization, believe that a large number of integrity, professionalism, good brand, famous warm enterprises will achieve a higher level of development.

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