The Value Of Integration Found In The Chemical Fiber Industry -- Mergers And Acquisitions

"Who knows that survival is often more cruel than fate, but no one is willing to give up."

This lyrics describe the corporate mindset that can not withstand the current downward pressure.

In this downturn, it is not easy to survive.

Many small businesses in Zhejiang are closing down.

When visiting enterprises, some enterprises expressed their reluctantly and planned to sell them.

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A website specializing in the sale of second-hand equipment told reporters that their business volume increased significantly this year.

Some companies bite their teeth and struggle to survive. They prefer to be their own boss or work for others.

And those leading enterprises pay more attention to cash flow and maintain competitive strength.

On the whole, several families are happy and sad.

Mergers and acquisitions are in this category.

The confrontation took place.

And looking for opportunities in the valley is also the wisdom of enterprises.

Chemical fiber enterprises can extend the industrial chain upward through their own PTA, and can also take this opportunity to buy weaving fabric enterprises downward. Large enterprises can acquire small businesses and enrich their varieties, and small enterprises can enhance their overall competitive strength through joint efforts of many enterprises.

A shortcut to go down

Economist Stiegler said that almost no one in the world's famous large enterprises or large groups has developed to some extent by means of capital operation such as mergers and acquisitions.

Almost no one has been fully developed through internal accumulation.

The survival of the fittest has provided more opportunities for mergers and acquisitions among enterprises. Large enterprises have absorbed small businesses, and strong enterprises have had better opportunities to integrate weak enterprises.

Earlier this year, the State Council issued a document requiring local governments to optimize the environment for mergers and acquisitions.

Local governments have more support policies for mergers and acquisitions.

At the same time, the expansion of the scale of individual enterprises formed by annexation and reorganization will also promote the improvement of industrial concentration.

Increasing the concentration of industries and regional clustered industries can enhance the competitiveness of large enterprises in the international market.

Sheng Hong, Rong Sheng and other enterprises of the first echelon of chemical fiber in China are moving up and down from the lower reaches, gradually expanding their industrial chains, and taking the opportunity to expand their scale after taking a firm foothold in the industry.

This is also an opportunity for them to do better.

A large chemical fiber enterprise in Zhejiang has acquired a weaving company and marched downstream. This is also a way to elongate the industrial chain, laying the foundation for the enterprise to set up textile and Garment Group in the future.

Reconsidering integration

At the China International Chemical fiber conference held in September this year, local officials in Xiaoshan said they strongly support the merger and reorganization of local chemical fiber enterprises and are willing to help them.

Reporters also learned that some enterprises have problems of capital chain breaking, and the local government held many meetings at the government bank and enterprise cooperation conference.

It is one of the ways to solve the problem and to bridge the merger and reorganization among some enterprises.

Annexation and reorganization itself is the inherent mechanism of the survival of the fittest in the market economy.

However, the local government's help for some enterprises has also broken the possibility of mergers and acquisitions of small enterprises by large enterprises. The main reason is that the government's bailout behavior has hindered the survival of the fittest to some extent, resulting in the merger and reorganization being affected.

The industry believes that many times in the history of the industry crisis, the government repeatedly rescue the market is also an important reason for the rapid expansion of the industry's capacity.

Under the thought of maintaining regional stability, the problem of stock integration in chemical fiber industry can not be solved in every adjustment period, and some large enterprises can only build new capacity themselves.

However, some big enterprises are not so enthusiastic about annexation of small businesses.

In a sand table promotion organized by China Chemical Fiber Association, a group of three large and medium-sized chemical fiber enterprises practice and simulate the management and market competition of simulated enterprises.

When the three enterprises were expanding at a low point, they faced the choice of reconstructing capacity or buying small businesses.

Their reason is that this is more efficient and convenient.

When asked why they did not want to annex small businesses, they gave several reasons: first, the equipment of small enterprises may be faced with the situation of elimination, which is unfavorable to the future development; two, the high cost of integration is mainly due to the identification and training of small business employees and the corporate culture; and three, the integration of the product structure of the enterprise may pay the same capital and energy as the new production capacity.

At the same time, these business managers believe that chemical fiber is a high return industry, low investment, the use of the latest technology to build capacity, will soon be profitable when the market is good, and the competitiveness will be improved. On the contrary, if the merger of small businesses is a burden, can not grasp the development of enterprises in the market rebound, it may miss the opportunity for development.

The reason why big enterprises are not interested in annexation of small businesses is that the thinking of large enterprises still stays in the era of seller's market in the past, and the market development space is very large. When the market gets warmer, big and small enterprises will regain their vitality.

However, the reality is that the capacity problem caused by the total inflation has not been solved, which has accumulated more pressure for the next crisis, and the scale effect has diminishing. After the market is saturated, the profit rate has been reduced, and it has been unable to help enterprises recover their costs in a relatively short time.

In addition, integrity is also an important aspect that must be considered in the annexation and reorganization of enterprises.

Some small businesses hide their business problems when they sell them.

This has also led to great caution in the annexation of small businesses by large enterprises.

Merger and reorganization is the re integration of resources.

Enterprises should take a look at the current situation from the perspective of development. In the past, only thinking about scale development has become a limitation of thinking on mergers and acquisitions.

Small businesses can also engage in joint ventures.

However, will small businesses be willing to be merged? The boss of a sliced textile enterprise in Zhejiang is always waiting for quotations and inquiring about the dynamics of big enterprises everywhere.

He said that under the current market circumstances, what should be done has been done and there is no way out.

Asked whether he was willing to be bought, he offered to wait.

Sliced spinning enterprises have no advantage in the process of technological development, especially when melt direct spinning technology can add functions online, these enterprises are faced with the fate of being eliminated.

However, small businesses have small plates and have the advantage of small boats.

Differentiated products are the magic weapon for the competition of these enterprises.

This year, a small enterprise producing hollow fiber in Jiangsu and Zhejiang Province has a good profit level, and the profit margin is even envied by large enterprises.

In addition, an enterprise representative of Beijing Zhongli textile machinery company believes that a large number of small businesses in a region can build an alliance team to reorganize and distribute resources in the form of alliances.

While playing a differentiated competitive advantage of small enterprises, the whole alliance will increase the scale advantage, which can enhance the ability of individual enterprises in terms of bargaining power and risk control in raw material procurement.