Plastic pipe out of the big city

Since last year, the country has successively introduced increasingly stringent property market control policies. It is expected that in the longer term, the real estate market, especially the first-tier cities, will be subject to policy pressure, thereby reducing the demand for plastic pipe in this area; plus the supply of first-tier cities. Drainage and heating supply facilities have been relatively complete, and the demand for plastic pipes will be very limited in the future. No matter whether it is farmland water conservancy construction or water-saving irrigation equipment, it is inseparable from plastic pipe and fittings. The demand for plastic pipes and fittings in the rural market has soared. Therefore, only when the target market is shifted from a big city to a rural or second-tier or third-tier city as soon as possible, can the plastics and tubing industry be able to seek advantages and avoid disadvantages and achieve rapid development.

Attractive business opportunities in rural areas

"After focusing on 'San Nong' for eight consecutive years, this year's Central Document No. 1 focused on water conservancy construction for the first time, which is undoubtedly of great benefit to the plastic pipe industry." Wang Zhanjie, secretary general of the Pipeline Committee of the China Plastics Processing Industry Association, accepts the report. Clearly stated during the interview. In the next 10 years, a total of 4 trillion yuan will be invested in water conservancy construction. Recounting the annual withdrawal of funds from land transfer funds for irrigation and water conservancy construction of 70 billion yuan, the direct investment for water conservancy construction in the next 10 years will reach 4.7 trillion yuan, and the funds for incitement may be as high as tens of trillion yuan.

Water conservancy construction focuses on farmland water conservancy construction, water-saving projects and rural drinking water projects. Because plastic pipes have the characteristics of light weight, corrosion resistance, high compressive strength, good weather resistance, small water resistance, easy processing and installation, and long service life, they will become the preferred pipe materials for water conservancy projects. It is expected that in the construction of rural safe drinking water projects, 30% of the funds will be used to purchase and install plastic pipes and fittings, which will bring about 1 billion yuan of business opportunities to plastic pipe enterprises every year. In addition, to cope with the frequent occurrence of abnormal weather, the country will also vigorously promote water-saving irrigation equipment, which has led to a surge in demand for plastic pipes and fittings in the rural market.

Second and third-tier cities have strong demand

“The business opportunities of the second- and third-tier cities real estate and urban pipe network bring plastic pipe enterprises are not small,” said Guo Runmin, general manager of Xi'an Gaoke Building Materials Technology Co., Ltd., told reporters. Under the pressure of a series of national regulatory policies, the real estate industry in the first-tier cities has been sluggish this year. However, new and real estate transactions in second- and third-tier cities have been very hot. Many real estate developers have shifted their focus to second- and third-tier cities. Even real estate development in small towns. At present, over 70% of the pipe in the real estate sector uses plastic pipe. With the accelerating pace of urbanization, second-tier and third-tier cities will replace the first-tier cities, which will become a new growth engine for the real estate industry, stimulating a significant increase in demand for plastic pipe and pipe fittings. It is expected that the demand for plastic pipe in this area will increase by around 20% annually, and the contribution to the growth of the plastic pipe industry will exceed 30%.

Guo Runmin believes that in the rapid development of the real estate industry in second-tier and third-tier cities, the construction of supporting infrastructure, especially the urban water supply and drainage pipe network and heating and gas supply pipe network will also accelerate. At present, 40% of gas supply pipes, 50% of heating pipes, over 70% of water supply pipes and 90% of drainage pipes in emerging cities are all plastic pipes. The transformation of urban pipe networks in the old urban areas mostly uses plastic and steel composite pipe fittings. All these It will substantially increase the amount of plastic pipes and fittings, and help boost the growth of the plastic pipe industry.

Innovation can win the market

“Although the plastic pipe market has an attractive prospect, due to the overcapacity and fierce competition, not all companies can benefit from it. Only those companies that continue to innovate can win the market and obtain substantial profits,” Wang Zhanjie reminded.

He said that at present, China has a total of 3,000 plastic pipe production enterprises, with a total capacity of more than 17 million tons. In 2010, although the national output of plastic pipe reached a record high of 8 million tons, the export volume hit another record high, reaching 396,000 tons, a sharp increase of 24.53% year-on-year, but still more than half of the production capacity was idle, indicating that the industry’s excess capacity is very serious. At present, many companies are still implementing capacity expansion plans, and as the effect of real estate control policies becomes apparent, the demand for plastic pipe materials in the construction of large and medium-sized urban real estate and urban water networks will be rigidly reduced, which will further exacerbate the industry’s excess capacity. At present, although rural markets, second- and third-tier cities, and large-scale water conservancy projects will increase the demand for plastic pipe, it will be beneficial to the mid- to long-term development of the industry. However, this market needs companies to develop and nurture, and it will take time and will not happen. Immediate effect of pulling. It is expected that in the next few years, especially in the first two years of the “Twelfth Five-Year Plan”, the growth rate of the plastic pipe industry may be lower than the average speed of the “Eleventh Five-Year Plan” period, and the market competition will become more intense. Only through technological innovation, management innovation, product innovation, and business model innovation can companies develop and produce differentiated products with high technological content and high added value, such as large-caliber, winding pipe, etc., with large market demand, and fully equipped supply capabilities. Only by satisfying the needs of users at multiple levels can we seize the opportunities and achieve leap-forward development.