Media Coverage
The Rubber Machinery Market Has Been Turning for Better
Source: China National Chemical Equipment Co., Ltd Date: 2017-03-09

The Chinese rubber machinery market showed a downward trend from the second half of 2014 and hit the bottom in the first half of 2016, with the sales revenue, the delivery value of export and profits realized plummeting by two digits, but from the second half of 2016, the operational environment began to turn for better, with significantly more orders and a much higher operation rate. Though the sales revenue and profits remained negative by the end of 2016, their margin of decrease has noticeably narrowed. It means that the Chinese rubber machinery market has dipped to the lowest and the year of 2017 will see its recovery from the bottom.  

Slight decrease in sales revenue

According to a survey by the Rubber Machinery Division of China Chemical Industrial Equipment Association on 26 major rubber machinery manufacturers in China, in 2016, the combined sales revenue registered RMB 7.1 billion, down by 5.6% from the previous year (same as below). From that we can estimate that in that year, the total sales revenue of Chinese rubber machinery market was RMB 9.6 billion, down by 5.9%, a much smaller margin of decrease compared with that of more than 20% in 2015 and the first half of 2016.

As to orders and the operation rate, the market experienced two extremes throughout the year. In the first half of the year, rubber machinery manufacturers received few orders, down by more than 50%, and the rate of operation fell to about 60%; but in the second half, orders began to flood in, and the operation rate rose above 80%, with many manufacturers operating at full capacity.

As per sales revenue, the top 10 manufacturers were Qingdao MESNAC,Safe-Run, Dalian North Rubber and Plastics Machinery, Yiyang Rubber and Plastics Machinery, Qingdao Doublestar Rubber and Plastics Machinery, Fujian Huaxiang Automatic Control Technology Company, Tianjin Saixiang Technology, Guilin Rubber Machinery, China Chemical Guilin Engineering Co., Ltd, and Beijing Jingye Mechanical Equipment Co., Ltd. Their combined sales revenue was RMB 5.83 billion, accounting for 60.7% of the industry's total, and the industry concentrate rate was up by 4.2 percentage points. The workforce in the industry has fallen by two digits, the output value of new products has increased considerably and the inventory is on the decline.

More profits realized

The profits realized of the companies surveyed fell by 28.0%, a margin much smaller than that in 2015 and in the first half of 2016. And three of them lost money. Because of overcapacity and the low concentration ratio, the market competition got intense in the first half of 2016 when orders shrank, and profits fell by 200%. Though orders increased in the next half of the year, the orders received in the first half were too cheap, plus the rising steel price, leading to poor profit performance for the whole year. But orders received in the second half of 2016 were mostly big orders and reasonably priced, good for generating profits for manufacturers. Thus their profitability is expected to be much improved in 2017.

Export increase

The delivery value of export for the 26 manufacturers surveyed was RMB 1.597 billion, up by 19.8%. From that we can estimate that in 2016, the total delivery value of export in the industry was USD 300 million, up by 13.2%.

As per their delivery value of export, the top 10 manufacturers were Qingdao MESNAC, Guilin Rubber Machinery, Tianjin Saixiang Technology, China Chemical Guilin Engineering Co., Ltd, Dalian North Rubber and Plastics Machinery, SINOARP, Sichuan Yaxi Machinery, Beijing Jingye Mechanical Equipment, Beijing New Universal Science and Technology, and Yiyang Rubber and Plastics Machinery.

Among them, Guilin Rubber Machinery saw bigger increase in export, with the delivery value of export up by 529%, accounting for 56.24% of total sales. The total delivery value of export took up 20.3% of the total sales in the industry, up by 2.1 percentage points. A major reason for the increase in the delivery value of export is because many Chinese tire company have set up their own plants overseas and have huge demands for rubber and plastics machinery.

There will be more to follow suit. Preliminary statistics show that a dozen tire projects are afoot or to be launched, which will boost the export of rubber and plastics machinery. The stable international tire market, in particular deep-pocket investors such as Continental AG and Bridgestone, have created favorable conditions for the export of Chinese rubber and plastics machinery. It’s predicted that China’s export of rubber and plastics machinery will continue to grow and the Chinese rubber and plastics machinery market will be more integrated with the global market.   

(Source: www.cria.org.cn; contributed by: Chen Weifang)

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