Electromechanical export enterprises face the cost of life and death, the majority has been on the verge of loss

The latest research results of China Chamber of Commerce for Import and Export of Mechanical and Electrical Products show that the overall level of China's mechanical and electrical products export profits is low, averaging 3% to 5%. The recent increase in operating costs has further squeezed the profit margins of the electromechanical industry, with 77% of corporate profits falling, of which 44% fell within 10%, 38% fell by 10% to 20%, and 15% fell by more than 20%. Some home appliance companies reported that most of the export orders that have been received are on the verge of losses as the current round of operating costs has risen more than expected.   There are cost pressures before, and there are bargaining pressures. This is the embarrassing situation of many foreign trade companies in the sandwich layer. According to a recent survey conducted by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products for 100 mechanical and electrical enterprises, the production costs of mechanical and electrical enterprises have generally increased by 10% to 20% since the end of last year. Affected by this, most of the company's profit margins were further squeezed, and 77% of the companies said that profits are falling. "'Only can survive, no profit' is our status quo. In order to cope with the changes in the RMB exchange rate and the rise in raw material prices, we intend to increase the price of our products by 5%~10%, but whether foreign investors can accept it, we have no bottom in mind." Li Jieqiang, head of Shanghai Huiying Electronics Co., Ltd. told reporters that the only way out now is to produce more new products. Ling Xin, manager of North China Regional Marketing Department of Minghui Plastic Machine Co., Ltd., got a negative answer in advance. A few days ago, an old customer called to order two machines, but in the face of Ling Xin’s rising offer, foreign businessmen refused to accept it. "Now the cost of raw materials, labor costs, and freight charges are rising sharply. If you report it at the previous price, it is really a drink." Ling Xin said helplessly. The cost has generally increased by 10% or more. “Since the end of last year, the cost of raw materials for electromechanical enterprises has risen sharply. For example, the price of copper, the Shanghai copper index has risen from 62,000 yuan per ton in November 2010, and has recently hovered around 70,000 yuan per ton.” The person in charge of the Electrical and Mechanical Chamber of Commerce said in an interview with this reporter. The continuous rise in raw material prices has pushed up the cost of electronic components. According to statistics, as one of the important basic materials for printed circuit boards, the price of copper foil has been raised for seven consecutive months. The price of another basic material for printed circuit glass fiber cloth also rose from 0.68 US dollars to 0.7 US dollars per kilogram at the end of 2010 to the current 0.93 US dollars to 0.95 US dollars per kilogram. "The rise in the price of copper and fiberglass cloth has driven the continuous rise in the price of printed circuits, and eventually caused the price of most components of electronic information products to rise. At present, the purchase price of electronic components has increased by 10% to 15% compared with the beginning of the year." The person in charge of the Chamber of Commerce said. At the same time, the price of LCD screens, which account for 70%~80% of the cost of color TVs, is about 10%. The rise in prices of raw materials such as copper and industrial plastics (11200, 105.00, 0.95%) and alloys has had a significant impact on household appliances such as air conditioners and refrigerators. According to the company, these raw materials have increased by 10% to 15% since the beginning of the year.   It is worth mentioning that the automobile industry and other machinery industries are greatly affected by the high proportion of metal costs. Most machinery companies account for more than 50% of metal materials, and some companies even reach 70% to 80%. For example, steel (4931, 17.00, 0.35%) accounts for 70% of the cost of the entire vehicle, with the most used sheet and profile. According to the research report, compared with the same period of last year, the price of steel in the first quarter of this year fluctuated and the cost of automobile manufacturing increased by about 10%. Large-scale complete sets of equipment export enterprises are greatly affected by the appreciation of the renminbi. According to the research report of the Chamber of Commerce of Electrical and Mechanical Industry, the current export enterprises generally expect 4%~6% of the appreciation of the RMB this year. The export of large-scale complete sets of equipment is large due to the project (many of which are more than 100 million US dollars), and the collection period is long (generally 3). Years to 5 years), the exchange rate is very obvious. At present, due to the imperfect financial market in China and the fact that the capital market is not fully liberalized, compared with similar enterprises in other countries, Chinese enterprises are facing more difficulties. The new cost factor effect shows that “the electromechanical export industry is mostly capital-intensive and technology-intensive. Compared with labor-intensive industries, labor costs account for a relatively low proportion of product costs. The survey results show that 58% of enterprises Labor costs account for less than 10% of its operating costs, of which 60% account for less than 5%; 30% for companies between 10% and 20%; only 6% of companies account for more than 20% %." The above-mentioned person in charge of the Electrical and Mechanical Chamber of Commerce said. In this survey, 61% of enterprises believe that since the beginning of this year, first-line labor costs have increased by 10% to 20%, 24% of labor costs have risen by more than 20%, and 15% of mechanical and electrical export enterprises have risen by less than 10%. In addition to the rising labor costs of the first-line, the comprehensive personnel costs of enterprises including managers, market personnel, R&D personnel, and designers are also on the rise. The Chamber of Electrical and Mechanical Industry also found that in addition to traditional cost factors such as raw materials, labor, and appreciation of the renminbi, the effects of new cost factors such as logistics and financing began to appear and gradually became an important factor affecting corporate costs. Research shows that although logistics costs account for a relatively low proportion of corporate costs - 67% of companies said logistics costs accounted for less than 5%, 21% of companies accounted for between 5% and 10%, but international oil prices The impact of rising logistics costs on corporate costs is gradually emerging, with 80% of companies saying that logistics costs have increased by 5% to 10% since the beginning of the year. According to statistics, China's automobile logistics costs account for about 10% of the total vehicle cost, while the international advanced level is 4% to 5%. Chinese cars win at lower prices in the international market, and the rising logistics costs weaken the international competitiveness of China's automobiles. The effect is more obvious. "In addition, since the end of last year, the central bank has continuously raised interest rates to control inflation, further increasing the financing costs of enterprises, and the financing difficulties of SMEs have become more prominent. Some enterprises also reported that the power supply is tight and the Japanese earthquake caused some precision zero. The rise in component prices has also caused some cost pressures," the person in charge pointed out. International competitiveness is weakened The reporter learned that the overall level of China's mechanical and electrical products export profits is low, averaging 3% to 5%, and the recent increase in operating costs has further squeezed corporate profit margins. According to the survey results, 77% of corporate profits fell, of which 44% fell within 10%, 38% fell by 10% to 20%, and 15% fell by more than 20%. "There are some main household appliance companies that reflect that the current round of operating costs has risen more than expected, and most of the export orders that have been received are on the verge of losses," the official said. The price advantage is further weakened by the high operating costs, and the international competitiveness of China's mechanical and electrical products is therefore not as good as before. “The vast majority of companies report that even a small external price increase has a greater impact on competitiveness, and the market share may be declining.” The person in charge said that major home appliance companies have always relied on higher product cost performance to win the market. However, many companies have reported that the price gap between their products and Korean high-end products has been further narrowed. Some low-end and mid-range mechanical and electrical products originally relied on low prices to obtain orders. After rising costs, they began to be fiercely affected by some products from Turkey, Southeast Asia and South America. competition. Mobile phone companies have reflected that in the past, enterprises have a competitive advantage in the global market with high-speed order response capability and cost leadership. The rising operating costs have a negative impact on the price advantage, which brings great pressure on the consolidation and strengthening of the international competitiveness of products. However, the company is generally optimistic about the future export situation. The survey results show that 66% of the surveyed mechanical and electrical enterprises still said that exports will maintain growth in 2011, and 52% of them are expected to increase by more than 20%, 28%. The company is expected to increase by 10% to 20%, and 20% of enterprises are expected to increase by less than 10%. At the same time, 16% of enterprises expect that the annual export volume will be basically the same as that of 2010, and 18% of enterprises expect Exports will decline to varying degrees.

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