China's valve industry gradually improves its international status

Editor's note: The latest statistics from foreign industrialized countries are quite interesting: the output value of the valves in these countries exceeds the sum of the output values ​​of compressors, American standard gate valves, American standard ball valves, forged steel valves, fans and pumps, and accounts for the entire machinery industry. 5% of output value. A phenomenon in these countries is even more intriguing: In recent years, more and more valve products from China have flowed in the international valve market, but the right to speak in the international valve market is not in the hands of Chinese companies. How should Chinese valve companies face fiercer market competition?

Obviously, there are gaps and existing problems are not terrible, as long as we adjust the development of ideas, enhance development confidence, strengthen enterprise management, promote technological progress, attach importance to technological innovation and core technology research and development, improve the company's core competitiveness. In the near future, China's valve backbone enterprises will surely be able to catch up with and surpass foreign similar companies, contribute to the nationalization of major national technical equipment, occupy a certain share in the world valve market competition, and become a strong country in the world of valve manufacturing.

The lack of technological innovation in the domestic valve companies due to the impact of the necessary casting, forging, welding, electroplating, pickling, etc. in the valve production, the investment in environmental protection is relatively large, so in recent years, developed countries have produced labor-intensive valves, especially General valves moved to developing countries such as China. They usually purchase valve products that meet the standard requirements from developing countries, and then sell them to developing countries and developed countries. Or it is a wholly-owned or joint-venture enterprise in a developing country, and the product is sold back. Realistically speaking, in the industrial transfer in this developed country, China's valve companies still get many benefits.

Many companies have achieved ISO9001 quality management system certification and API certification, and some companies have also achieved EC CE safety certification. At the same time, many of China's valve companies have been able to fully produce API standard gate valves, globe valves, check valves, ball valves, butterfly valves and other products. The product quality can fully meet the requirements of ISO5208:1993 inspection standards. As a result, China's valve products have been increasing year by year. Taken in recent years, the export value of exports in 2001 was 380 million U.S. dollars, the export value of exports in 2002 was 430 million U.S. dollars, and the export value of exports in 2004 was 656 million U.S. dollars, showing that the export situation was very good.

What is even more gratifying is that China's valve industry has already established factories abroad, such as the Suzhou Valve Factory, which has already established a plant in Iran. Some manufacturers also have offices in foreign countries. For example, Zhejiang Fangzheng Valve Factory has offices in Singapore, the Netherlands, and Italy. Almost all valves produced are sold abroad. At present, China's valves have been exported to the United States, Canada, Germany, Italy, more than 30 countries and regions, has entered the world valve market, China's valve exports in the world valve export countries ranked 11th.

However, despite the overwhelming flood of domestic valve products, Chinese companies still have no say in the international valve market. The price is the final say for others, and the rules are the final say for others. Developed countries purchase extremely low-end valves from China, and then sell them to developing countries at a higher price. They are both profitable and well-behaved. Domestic companies can only play the role of workers.

The coexistence of opportunities and challenges in the domestic valve market is that the international valve market cannot accommodate us? Obviously not. It is understood that the Middle East, as the world’s leading oil production and export region, is trying its best to increase the daily production of oil, and at the same time it has also increased the exploitation and investment of oil. Kuwait’s largest northern oil and gas development project is currently progressing in the coming years; Qatar will build the world’s largest natural gas liquefaction product processing plant; UAE plans to increase crude oil production through the construction of large-scale projects, and it is expected that daily crude oil production will exceed 3 million barrels. The Abu Dhabi National Oil Company plans to invest $1.5 billion annually in some projects over the next five years, of which 40% will be used in the oil industry... and the largest demand for each item is valve products. On the other hand, due to the severe destruction of oil fields and pipelines in the Middle East, Iraq, and other countries, they all need to import oil systems and valves for pipelines, including API gate valves, gate valves, globe valves, check valves, long-distance pipeline plate valves, and ball valves. These are the main products of domestic valve manufacturers and our strengths. Why don't we grab these businesses ourselves?

China's valve is gradually improving its international status As long as we understand the needs of the market, domestic valve companies have become dominant in the international market. As long as it is done in a proper manner, we can stand on the front of the market and act as the protagonist of the market.

Also such as sole proprietorship. Sole proprietorship refers to the independent establishment of factories abroad. It can be through the direct acquisition of existing local companies, or it can create a new company. The advantage of a sole proprietorship is that profits can be enjoyed exclusively, and more international marketing experience and market opportunities can be obtained. The parent company has full management and control over overseas subsidiaries. The disadvantages are large investment, high risks and many uncertainties.

First, foreign direct investment. Foreign direct investment refers to the actual ownership and control of foreign companies and direct participation in its management. From an equity perspective, it has two different forms, such as joint ventures. A joint venture refers to a company that invests in an enterprise with a local company in a foreign market. A joint venture can buy a new company by purchasing equity from a local company or co-financing. The advantage of a joint venture is that the benefits are greater. The company has control over marketing and production and can receive market information feedback. The disadvantage is that there are often contradictions between partners due to different views on production and marketing.

The second is exports. Exports include direct exports and indirect exports. Direct export means that the company directly sells its products to the international market. It also has two ways: First, it is sold to local markets through foreign middlemen. The second is that companies set up sales organizations abroad and sell the products directly to local customers. Indirect exports mean that companies export their products through domestic middlemen. The export method is the simplest choice. It does not require a full-time salesman, nor does it require a large amount of capital, and is flexible and risk-free. However, the shortcomings are also very obvious, that is, companies cannot directly participate in international sales activities. They basically get out of control of the export market. Market information feedback is limited, and it is difficult to make timely adjustments to changes in the market.

The third is license trading. Licensing trade is the right or technology granted by an authorizer to an authorized person with commercial value, including the right to use trademarks, patents, proprietary technologies, and so on. Due to the lack of management experience, well-known brands and unique technologies, domestic valve companies do not use much of this method. However, this is also a development direction that can encourage companies to cultivate their own brands and develop technologies with independent intellectual property rights.