The development characteristics of wood packaging industry and the composition of three barriers, macro and raw material related risks
1. Industry development overview
According to the Chinese national standard GB / t4122.3-2010, the definition of packaging is: the general name of containers, materials and auxiliaries adopted according to certain technical methods in order to protect products, facilitate storage and transportation and promote sales in the process of circulation, and also refers to the operation activities such as applying certain technical methods in the process of adopting containers, materials and auxiliaries to achieve the above purpose.
Since the reform and opening up, China’s packaging industry has developed rapidly and has formed a complete system covering the whole life cycle of design, production, testing, circulation, recycling and recycling. It can be divided into three categories: packaging materials, packaging products and packaging equipment, and five sub industries: paper packaging, plastic packaging, metal packaging, glass packaging and bamboo and wood packaging.
Bamboo and wood packaging industry is one of the subdivisions of the packaging industry, an important supporting industry of the national economy, and a necessary part of the modern packaging industry. Wood packaging containers and materials have good cushioning performance, high strength, corrosion resistance, good moisture absorption performance, and are easy to process and easy to assemble on site. They are widely used in many industries of the national economy. In the process of international trade and commodity circulation, wood is one of the widely used commodity packaging materials, and has always been an essential part of the packaging industry.
2. Industry characteristics
(1) Periodicity
Wood packaging industry is an important supporting industry in other industries of the national economy. Its products are widely used in many downstream fields such as chemical industry, building materials industry, food industry, food additive industry and pharmaceutical industry. The relevant market demand changes due to the cyclical impact of economic development. However, the downstream application fields of the packaging industry are very wide. In recent years, the overall development of China’s national economy has been stable, and the overall demand of the packaging industry has shown an increasing trend, with no obvious cyclical characteristics.
(2) Seasonality
Enterprises in the wood packaging industry mainly carry out a series of production and operation activities such as scheme proposal, product design, technology research and development, production and manufacturing, and after-sales service according to the specific needs of downstream customers. As there are many application fields in the downstream industry, the number of customer orders obtained by enterprises in the industry depends on the overall production and manufacturing level and comprehensive service capacity of the enterprise. Therefore, there are no obvious seasonal characteristics in the industry as a whole.
(3) Regional
As wood packaging products are widely used and permeate many industries of the national economy, the regional distribution of wood packaging industry is also highly related to the economic development level of specific regions. Among them, the Pearl River Delta and Yangtze River Delta are the main manufacturing bases of Electromechanical, automobile and machinery in China, and most of the wood packaging production enterprises are gathered. At the same time, because wood products are restricted by factors such as logistics distribution, transportation cost and customer geographical location, they have a certain sales radius and show obvious regionality. However, large-scale wood packaging has certain requirements on technology. Therefore, customers in the underdeveloped areas of wood packaging such as northeast, Inner Mongolia and Shandong have more cooperation with packaging enterprises with technical capabilities in the Yangtze River Delta.
3. Industry barriers
Enterprises in the wood packaging industry will mainly face the following barriers to achieve greater development:
(1) Customer resource barrier
The development of customer resources and the establishment of product sales network are the key factors for the survival and development of enterprises in the wood packaging industry. Packaging boxes are non-standard products designed around the characteristics of customers’ products. With the upgrading of customers’ products and the entry of new customers, the optimization speed of wooden packaging boxes is required to be higher, which puts forward higher requirements for the design ability, rapid response ability, flexible manufacturing ability, quality assurance ability of products and services and other comprehensive strength of enterprises in the packaging industry. In order to ensure the safety and stability of their own product quality, downstream customers will not easily change their packaging service suppliers. In particular, in order to avoid the quality problems of packaging boxes affecting the efficiency of their entire production line, relevant enterprises usually establish long-term cooperative relations with suppliers with large scale and long-term cooperation, which leads to obstacles for other packaging enterprises to win customer resources, Then, it constitutes a barrier to market entry for new entrants in the wood packaging industry.
(2) Capital Barrier
With the increasingly fierce market competition in the wood packaging industry, in order to maintain and strengthen the leading technical advantages in the industry, wood packaging enterprises need to continuously carry out a large amount of research and development investment, purchase and update advanced equipment, while most of the high-end equipment are expensive, and the purchase of equipment in the previous period and the subsequent production, operation and maintenance require a large amount of capital investment. For most small and medium-sized enterprises in the industry, a large amount of capital investment is a major obstacle for them to enter the high-end packaging industry, and also a major obstacle for them to realize large-scale operation, reduce unit product costs and obtain a favorable competitive position.
(3) Customer certification barriers
To ensure the safety and stability of their product quality, downstream customers will start from the source suppliers, put forward higher and stricter requirements for the comprehensive strength of suppliers such as design, testing, manufacturing and management control level, and form a complete set of very perfect assessment system. This system includes: design and production capacity assessment, management system, quality system, environmental system, production management process Environmental protection of raw materials, etc. It is difficult for new market entrants to pass the customer assessment, review and certification in a short period of time, which constitutes a barrier to market entry for new entrants in the wood packaging industry.
4. Basic risk characteristics of the industry
(1) Risks of macroeconomic fluctuations
The downstream of the wood packaging industry involves all walks of life of the national economy, including electronic information, microcomputer manufacturing, communication, mechanical and electrical equipment manufacturing, automobile and auto parts manufacturing, food and beverage, medical equipment and pharmaceutical, daily chemical, etc. The supply and demand situation of the packaging industry is closely related to the demand situation of the downstream industries. Affected by the national macroeconomic development situation and the growth rate of the national economy, the order volume and operating rate of enterprises in many downstream industries show certain volatility, which may adversely affect the demand for wood packaging products and services.
(2) Raw material price fluctuation risk
Since the purchase cost of raw materials in the wood packaging industry accounts for a large proportion of the total cost, the fluctuation of raw material prices has a great impact on the industry profit rate. In recent years, the price of wood has fluctuated in different ranges. On the one hand, it occupies a large amount of working capital of the enterprise, and on the other hand, it also poses more severe challenges to the raw material procurement cost control of the enterprise and the maintenance of the gross profit rate of the product. Enterprises with small production scale and weak capital strength will find it difficult to bear the risks brought by the price fluctuations of raw materials.
Post time: Aug-29-2022