Low price pain in wire and cable industry

Xiao Bian learned that, over the years, although the wire and cable industry industry organizations have repeatedly called for price self-discipline, but the price of wire and cable products on the market is still chaotic, counterfeit and shoddy products, product profit fell sharply, making cable companies very injured. . China already has more than 7,000 small and large wire and cable companies, and 97% of them are privately-owned small and medium-sized enterprises. Some of these companies do not have the capacity for production, quality control and inspection, and they concentrate on low-end products and overcapacity. In front of the immediate interests, they have changed their markets at low prices, and there has been a farce in which "prices are not worth it". Wire and cable industry, the average sales of net profit rate of less than 5%, there are many manufacturers even less than 3%.

It is understood that China's wire and cable industry, the cost of raw materials accounted for more than 80% of the total cost, the main cost of its expenditure on copper and aluminum in the two major metal materials. In general, for every 5% rise in raw material prices, the gross profit of the product is reduced by 4%.

In fact, wire and cable falsification is a chain reaction brought about by the industry's "low prices." In the low-price market competition environment, if the enterprise produces according to the national standard and strictly implements the technology, it will inevitably lose a lot. In addition, corporate profits have been squeezed, the average profit rate of the industry has been declining, and it is difficult for enterprises to ensure reasonable profits. Some unscrupulous enterprises have taken the risk and eventually gained profits through shabby means such as "stealing work cuts," "reducing cable cross-sections," and "shrinking inferiorly," and the quality of wire and cable products is difficult to guarantee. More than half of the fires that occur in the country each year are electrical fires, and more than 50% of them are caused by short-circuits in wires and cables. Poor wire and cable into the market and major engineering projects, can easily lead to fire accidents, resulting in economic losses, but also easily lead to adverse social impact. Although price is not the sole criterion for measuring product quality, price must be an important manifestation of product quality. If "price is not worth it," then what about quality?