The Exploration and Breakthrough of Wire and Cable Manufacturers with the Emergence of New Infrastructure
Under the wave of new infrastructure, the manufacturing industry is facing large developmental opportunities. As a key branch of infrastructure, the wire and cable industry is actively seeking ways to achieve breakthroughs by making creative and positive attempts in the digital and intelligent transformation.
1. Coexistence of Opportunities and Difficulties
The new infrastructure refers to the infrastructure that focuses on high-tech products in 7 areas, including 5G projects, UHV, inter-city high-speed railway and inter-city rail transit, new-energy vehicle charging piles, big data centers, artificial intelligence, and the Industrial Internet. The field involves many key industries concerning people's livelihood, such as communication, power, transportation, and digital.
As a major change in the field of mobile communication, 5G is leading the current tide of new infrastructure construction. Following 5G, UHV, inter-city high-speed railway and inter-city rail transit, new-energy vehicle charging piles, big data centers...every field like that contains a huge market.
For the current situation of the wire and cable industry in China, it has developed rapidly with the continuous expansion of infrastructure such as electricity, data communication, and urban rail transit under the fast economic development. Especially in recent years, under the stimulation of the "One Belt One Road" strategy, the scale of the wire and cable industry has continued to expand. Today, there are more than 4,000 large-scale enterprises in China's wire and cable industry, whose output value ranks first in the world.
While the scale of the industry continues to expand, it is undeniable that China's wire and cable industry is still facing many difficulties, especially as it gradually enters the period of deepening development, problems such as low industry concentration, the high degree of decentralization, and technical homogeneity of products are becoming increasingly outstanding, which to a certain extent, restrict the development of China's wire and cable industry.
From the perspective of the size variation of enterprises in the wire and cable industry, small and medium-sized enterprises account for more than 95% of the entire industry, and the top 10 enterprises in this industry occupy only a little share in the domestic market, much lower than the level in the foreign market. To a certain extent, it reflects the low concentration of the domestic wire and cable industry and the failure of proper integration of industrial resources, which can bring mutual benefits based on the large production scale. Moreover, the low industry concentration has also caused most companies to focus on developmental speed rather than developmental quality. For instance, the small and medium-size enterprises' technical skills and production capacity are so uneven that their high pressure of survival has made it difficult for them to do technical research and development or process improvement with extra resources and energy. Their products are mainly concentrated in the low-end market, which have low technical content, high homogeneity, and weak core competitiveness.
As far as the high-end market of wire and cable products is concerned, foreign brands still have strong leadership and competitiveness, since their products have high technical content, industry-leading patents, and high reputation and recognition in the hearts of consumers.
However, it is undeniable that in recent years, more and more Chinese wire and cable manufacturers have been deeply aware of the bottleneck of industrial development. They are optimizing industrial layout, accelerating technical innovation of products, and providing overall solutions. They try to break through the competition in this industry and make scientific arrangements for the high-end wire market.
2. Deepening the Industry Layout
During the COVID-19, the frequent application of new technologies such as telecommuting, online meetings, online courses, and big data tracking has enabled people to see the inevitability of digital and intelligent development. From the perspective of new infrastructure, the major areas involve 5G as the leader; big data centers, and artificial intelligence, etc. have all emerged in the digital age. As a key area of new infrastructure supporting the digital, networked, and intelligent transformation of economy and society, 5G not only plays a prominent role in helping epidemic prevention and control, resumption of work and production, but also has great potential in stabilizing investment, promoting consumption, supporting upgrades, and creating new economic development force. Related data shows that by the end of 2020, the number of 5G base stations in China will exceed 500,000, and the cumulative investment in 5G national networks will reach 1.2 trillion yuan.
The development of the 5G industry is bound to have a significant driving effect on the upstream and downstream industrial chain, especially on the demand for optical fiber and cable, which will increase greatly. In the bottleneck of product homogeneity and overcapacity in the cable industry, it is a real problem of how to break through the market that many cable companies are striving to accomplish. Yixing in Jiangsu is the largest wire and cable production base in China. Nearly 20 of the 125 large-scale local cable companies are directly related to the products required for the new infrastructure. Under the new infrastructure boom, many companies have already understood the trend and taken the lead with powerful strategic measures.
Unlike other companies that try to go further in the current industrial fields, Far East Smarter Energy Co., Ltd. has taken an unusual approach and expanded its business scope with a diversified industrial layout. In March 2020, Far East Smarter Energy announced its plan to invest 1.84 billion yuan to build the overall industry chain of optical fiber and cable, further improve the product structure and business layout, and probe into the promising market segment of optical fiber cables. The industry chain will focus on the development of 56 types of optical cables or optical and electrical hybrid cables such as data cloud optical cables and sensing optical cables and provide high-quality products and customized solutions for 5G construction, Industrial Internet, and other fields. After the completion of the project, it will have an annual production capacity of 1,500 tons of preforms, 50 million kilometers of core optical fibers, and 35 million kilometers of core optical cables.
3. Promoting Transformation and Upgrades
Wire and cable products are the basic guarantee for the normal operation of modern economy and society, which are widely used in the construction of the national economy and provide important support for various industries, national defense, and major construction projects. They are the essential devices for transmitting electric energy, delivering information and manufacturing various motors, instruments, and meters that realize the conversion of electromagnetic energy, as well as the basic products for social electrification and informationization in the future.
With the continuous construction of smart cities and the rapid development of the new energy industry, the demand for high-end wire and cable products is increasing. Particularly with the rise of new infrastructure, infrastructure construction is required to follow the trend of networking, digitization, and intelligence. High performance, high quality, more environmentally friendliness, durability, safety, and energy-saving are the future direction of cable products.
In the wave of new infrastructure, only by insisting on the idea of innovation-driven and continuously promoting intelligent and digital transformation can manufacturers in the wire and cable industry accelerate the transformation of the industry to high-end and provide more intelligent and information-based products and services for the new project. Wire and cable manufacturing companies that are seeking ways to make breakthroughs must seize the developmental opportunities brought by intelligence and digitization, and firmly follow the new developmental path of the integration of information technology and equipment manufacturing.
In May 2020, the shipment volume of Far East's products hit a record high. This is due to the fact that Far East while providing overall solutions for new infrastructure, has carried out "new infrastructure" within the enterprise - through the creation of intelligent production lines, improvement of production technology, and increased investment in technology research and development, managing and controlling the full cycle of production processes, accelerating digital transformation and elevating the level of intelligent manufacturing so that to improve production efficiency and reduce operating costs.
Take UHV in the seven major areas of new infrastructure construction as an example. The first batch of private enterprises that emerged after the reform and opening up relied on post-doctoral workstations and academician workstations, while Far East participated in the construction of China's first UHV transmission line as early as 2009 - the "Southeast Shanxi-Nanyang-Jingmen" 1000 kV UHV AC Test and Demonstration Project. China's UHV has a history of 11 years, and Far East has also accumulated 11 years of experience in the UHV field. It can provide overall solutions for the construction of UHV projects in different scenarios and fully meet the needs of power grid construction. Today, Far East is providing overall solutions for UHV with better products and services.
4. Precise Brand Strategy
While developing the manufacturing industry and promoting its transformation and upgrading with all strengths, Far East is also focusing on cultivating the world-renowned "Chinese brand". At the same time, it actively promotes Chinese brands to go overseas and strives to realize the three major transformations of "Chinese manufacturing to Chinese creation, Chinese speed to Chinese quality, and Chinese products to Chinese brands", promoting China to join in the leading manufacturers all over the world.
The brand is an essential part of the core competitiveness of a company, which determines the company's profits, the success or failure of the products, and the strength of its people. For cable companies who want to move from the low-end to the mid-to-high end, and advance from the domestic market to the global cable market, they must build a high-end brand image in the fierce market competition and promote the high-quality development of the industry with brand innovation.
Under the impact of the COVID-19, the manufacturing industry, as the main body of the national economy, needs to establish the brand trust to deal with the epidemic impact, maintain the security of the national economy, and ensure the healthy and sustainable development of China's economy. Also, they must comprehensively enhance brand vitality, penetration, social cohesion and influence, improve management, enhance competitiveness, and increase developmental strength, and thus promoting a new era of reborn companies with strong self-reforms and innovative minds, and empowering the emergence of strong brands that drives industrial development by leaps and bounds.
In addition, with the development of society and the advancement of science and technology, when shaping brand images, manufacturers should get rid of the traditional restrictions of focusing on B-end audiences only, but should closely follow the brand trend, and make full use of new technologies such as big data and artificial intelligence. Also, they should appropriately learn from good branding methods of consumer goods, and carry out brand penetration and connotation for C-end audiences, so as to help achieve the ultimate goal of product-effect integration.
5. Training of High-end Talents
At present, China's intelligent manufacturing has an obvious deficiency in independent innovation, resource utilization, industrial structuring, process informatization, and quality and efficiency maintenance. The underlying reason is the lack of support for talented people and appropriate policies.
Talents are the most precious wealth and an important resource in strategy. In the route from a large manufacturer to a strong manufacturer, integrated talents of both manufacturing and digital are becoming an important support for such progress.
From the perspective of the wire and cable industry, in addition to the large expansion, overcapacity, and oversupply of some products, entrepreneurs are facing large insufficiency of talents, especially in the current digital transformation of enterprises, where the demand for digital, networked, and intelligent technical talents is dramatically increasing. "How to cultivate, absorb, and retain talents" is also an important topic that the wire and cable industry and the entire manufacturing industry need to explore and experiment with.
As for talent training within the industry, it is necessary and urgent to form a talent training mechanism for the working talents in the digital transformation of the manufacturing industry by grasping both the theoretical knowledge and practical skills, to cultivate more experts with great knowledge, rich information, and professional skills. In the cultivation of talents, it is essential to make full use of industrial think tanks and technical specialists to create a "leading team" in digital transformation, thereby driving the progress of industrial talents. Simultaneously, companies that already have pioneering techniques should take the active lead to carry out talent cultivation programs, and use their developmental models to empower the industry to transform and upgrade.
From the perspective of talent attraction in the industry, manufacturing companies should set up the best-employer images in the whole society, and adopt more innovative plans, more real-life activities, and more widespread influence to insert humanistic genes in this field, to show the new image of intelligent manufacturing in the new era, and to convey the feelings and sentiments of serving the country, which will attract more great talents, especially the new generation, to join the manufacturing industry.
