Tire industry ushered in small-scale investment expansion

Recently, Li Keqiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, made important instructions on "de-capacity."

Li Keqiang emphasized that the resolution of excess production capacity must be unwaveringly promoted and prevented from resuming.

This important directive once again highlights the importance and arduousness of “de-capacity”.

According to the Tire World Network, the tire industry is an industry with excess capacity, but recently a number of companies have increased their production capacity to form a small upsurge in investment expansion.

Is this contrary to the spirit of the Central Government?

Over 50 million new production capacity

In the first half of the year, a number of domestic tire companies announced plans to expand their production, setting off a small upsurge of "on the project."

According to the Tire World Network statistics, the number of these newly built and expanded tires projects is nearly 20, and after the project is put into production, the annual capacity of new tires can easily exceed 50 million.

At present, there is a serious excess of domestic tire production capacity, and the overall operating rate of the industry is only a little over 60%. This means that close to 40% of tire capacity is idle excess capacity.

Tire business executives told Tireworld.com that the domestic tire industry is reshuffling and the business status of the companies is extremely polarized.

He believes: "At this time, some well-run enterprises, with high operating rates and best-selling products, have rushed around to paving the way for the future reshuffle."

It is understood that there are several tire companies in Shandong Province, in the development of this round of eye-catching performance.

For example, the expansion of the production of triangular tires continues to advance, and its capacity is expected to increase by 20% in 2017.

Huaqin Rubber Group launched a new tire project, with an annual production capacity of up to 14 million.

Yongfeng tires of Hengfeng Rubber & Plastics, Huasheng Rubber, Haohua Tire, Yinbao Tire and other companies are also actively expanding production.

In addition to these companies, some companies in transition are also expanding their production capacity, such as Qingdao Fulin tires. This company is changing from a trade tire enterprise to a production enterprise.

Corporate investment is "cool"?

"It is worth noting that this round of tire expansion is somewhat different from the investment boom of previous years."

Tire World Net understands that a few years ago, the tire industry made a considerable profit and attracted a large number of companies to invest and build factories. Even some investors who do not understand the tire industry have also been involved in tire production.

At that time, as long as they were rich in textiles and real estate, they would build tire factories.

Due to the relatively low investment threshold and the encouragement of some local governments to attract investment, a large number of tire projects have been launched. This has caused severe overcapacity and fierce competition in homogeneity.

According to industry sources, the government is now strictly controlling the overcapacity industries. This batch of production expansion projects are the result of "cool" planning in the industry.

Tyres are an industry that requires relatively high technology, capital, and labor. Coupled with increasingly stringent regulatory measures such as environmental protection, the industry's threshold has increased a lot.

According to analysis, at present, in the “big melee” where the tire industry is undergoing transformation and upgrading, it is inevitable to increase new production capacity with promising development.

Regarding the questions raised at the beginning of this article, a person in charge of a tire company stated that “decapacity” means backward production capacity, and high-quality production capacity is not excessive. On the contrary, the purpose of eliminating backward production capacity is to create better development of high-quality production capacity. surroundings.