Domestic die & mould sector enters new growth era

By Shen Zejin

Last year, China's die and mould industry faced huge challenges. People from China Die and Mould Industry Association, one of the organizers of mould exhibition, introduced that, last year sales volume of mould industry in China was RMB 95 billion yuan, increasing by 9.2 percent compared with that last year, while the increasing rate was about 10 percent slower.

One investigation from China Die and Mould Industry Association showed that 20 percent mould manufacturing companies were "basically not influenced by the global financial crisis" and about 40 percent were "influenced or greatly influenced". The investigated companies generally agreed development of mould manufacturing companies would be further slowed down this year. It's worth noting that most of those investigated companies this time were large or key members of local industry. Average and small-sized companies will face more difficulties.

The 9.2 percent sales growth rate of last year was for the first time lower than the average rate of about 20 percent in other years, but this was also great since it was achieved under circumstance of global financial crisis. Last year the import volume in China's die and mould industry reached US$2,004 million, holding a same value of latest two years; the export value was US$1,922 million, increasing by 36 percent over 2007; besides, mould export is keeping a growth rate of 30 to 40 percent in these years. Mould manufacturing companies in China are taking measures to make breakthrough. Mould demand from industries like mechanism, home appliances, auto cars and IT electronic information was further pushed. International purchasers are increasing their purchasing proportion in China year by year. The mould industry in China still holds a strong development tendency this year. In recent years, the comprehensive competitiveness in China has been strengthened. The manufacturing technique has been improved and some are approaching or have already reached the international level. International market has been further enlarged.

Provide equipment for lower-stream industries

Cao Yan'an, standing deputy-director of China Die and Mould Industry Association, expressed that after more than half a year's attempt and effort, a common sense towards crisis had been reached in the die and mould industry, that is, to keep future in view based on current situation and hold confidence when facing challenges.

At present, Chinese government has launched many policies on expanding domestic demand and promote economic growth, including "Home appliances to the countryside" and the abolition of the tax on purchase of "small cars", and all of them have placed positive influence on mould industry. The restructuring and revitalization plan of equipment manufacturing industry chooses to focus on technical level promotion of mould and equipment manufacturing. The mould special project in the fundamental equipment's functional part (key parts) projects of the sixteen national significant science and technology programs also represent significance of mould sector in manufacturing industry.

Many mould manufacturing companies have found that there is still big exploitation space in current international market. For example, as foreign auto companies are making adjustment to develop new models, mould manufacturing companies in China will have advantages in competition. Besides, with a sound basis, die and mould industry in China should utilize its advantage of cost performance in international mould purchase to develop the market with certain focus step by step, and to find new economic growth point in newly-formed market, so as to enlarge international market shares while maintaining domestic market shares.

Domestic market can also exploit in new fields for customer services. Such matters as how to make achievements in aspects of automobile, navigation, medical appliance and new energy etc., and how to seize commercial opportunities in projects including Beijing-Shanghai high-speed railway construction with an investment of RMB 220 billion yuan, large aircraft project with an investment of over RMB 30 billion yuan and Shanghai 2010 EXPO with an investment of RMB 30 billion yuan to transform these projects into actual orders should be drawn attention that it's still necessary to segment market, lock on object customers and promote diversified operation, and with mould manufacturing as core element, to extend industrial chain to provide equipment and products for lower-stream industries, so as to satisfy demand of market differentiation.

Seize opportunities to enhance competitiveness

Facing the influences brought by the global financial crisis, far-sighted entrepreneurs have quickly taken measures rather than just waiting for chances. These companies have made full use of time to enhance their comprehensive competition power, adjust industrial structure and try to overcome the bottleneck formed in the fast-development period. They also make efforts in technology improvement, personnel training, new product research and development and market exploitation. These measures have already assisted some companies to defuse crisis and even enlarge foreign market shares.

Insiders suggest that mould manufacturing companies should build a sound foundation of research and technology. Firstly, they should optimize manufacturing technique, raise efficiency and enhance competitiveness. Secondly, they should pay attention to demand from lower-stream companies, follow and study their technological progress, focus on key parts research and development of significant industrial projects and lead in mould design and manufacturing. Thirdly, many new products, new technique and new technology can represent the increasing progress trend of die and mould industry in China, therefore the companies should actively implement mould patent application and key mould technology research reserve, so as to prepare for the next round of development in mould industry.

In terms of cost control and informatization, experts suggest that companies should upgrade management specialization, raise equipment utilization ratio and efficient man-hour rate, make full use of informatization to reduce human's influence and increase transparence in manufacturing processes so as to achieve predictability and planning, and pay attention to network service and establish emergence response mechanism which can help customers learn the manufacturing process, raise communication efficiency and shorten delivery period. And what's more, they should focus on company strategic research, make thorough reflection and consideration on capital flow, industrial base transfer and international cooperation, and finally realize a complete upgrade in market adjustment.

In the aspect of personnel introduction and training, it's important to improve personnel quality, keep core talent people stay, and realize transformation of technicians to professional specialists and transition of managers from professional to operational. Companies should establish encouragement mechanism for high-skilled personnel to motivate their innovative and creative capability.