Four key points of overseas investment in the hott

2022-08-08
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Four key points of overseas investment in the glass industry

with the change of China's development model, the slowdown of economic growth has become a new normal. After the "great leap forward" expansion and production increase in the last economic cycle, the chronic disadvantage of serious overcapacity in China's flat glass industry is now highlighted

with the change of China's development model, the slowdown of economic growth has become a new normal, In the last economic cycle, after the "great leap forward" expansion and production increase, the chronic disadvantage of serious overcapacity in China's flat glass industry is now prominent. More than half of the flat glass enterprises are operating at a low level below the production cost line, struggling to support, and the profit index of the whole industry has fallen to an all-time low. Under the heavy pressure, many flat glass enterprises invariably look abroad and take "going out" as the current preferred option. It is reported that at present, there are a large number of enterprises with overseas investment intention, which is difficult to count; Dozens of enterprises have signed intentions and agreements for foreign investment, joint ventures, relocation and other projects, which is a spring night and flowers are in full bloom. Opening up territory abroad seems to be a good medicine for today's glass enterprises to relieve their constraints and resolve excess capacity

it is true that due to the unbalanced development of the world economy, the glass market in some less developed countries has not been saturated. Therefore, we have reason to expect to get a share in Africa, Central Asia, South Asia and other regions. But in the face of the opportunities and benefits that seem to be close at hand, are our eager entrepreneurs really ready

"investment has risks, and decisions need to be cautious". This is an old growth talk, which is nothing new. In the context of the current overseas investment fever in the glass industry, it seems to be a mere formality. However, historical experience and lessons have told us countless times: ignoring risks, blindly optimistic and random investment behavior may make a big mistake at any time, so as to ruin the future of the enterprise. Therefore, it is necessary for us to temporarily suppress the impulse, keep a sober mind, and calmly think about the following questions in the frenzy:

first, will China's overcapacity be copied abroad

as we all know, in recent years, China's glass production capacity has expanded at an astonishing speed. The investment boom driven by interests is like a flood, and the so-called value depression is instantly filled, leaving the entire industry mired and unable to extricate itself. In fact, the domestic call to curb overcapacity has been crying for several years, and its effect must be well known. Although the overseas market environment may be slightly different, but driven by interests, who can guarantee that another new version of overcapacity will not be copied abroad

a practical example is that two 600 ton float glass production lines of a domestic group company in Nigeria have broken ground, and now at least three other state-owned enterprises and private enterprises are also eager to try and actively follow up. Just imagine that Nigeria is an underdeveloped country after all. It is estimated that the current consumption of flat glass only needs a 6-high face value and slimming counterparts nbsp; The float method with a capacity of 00t/D can meet its market demand. If several float lines rush into it at one time, what a huge impact it will have on the fragile local economy and ecology. You know, India, with a population of more than 1.2 billion, has only eight float glass production lines. How many lines can the Nigerian market accommodate? Has anyone seriously investigated and studied the low risk of establishing a recycled plastic granule factory? Therefore, in the end, I'm afraid that the smoke of the domestic glass price war has not yet dissipated, and the war of vicious competition abroad has rekindled, with devastation everywhere and chicken feathers everywhere

second, is it "transfer" or "transformation"

throughout the world, the well-known Western glass companies (Saint Gobain, Pilkington, Corning, and metronidazole) are all engaged in transnational operations. They have set up sites all over the world and firmly occupy the high-end market of the world's flat glass. The common characteristics of these industry leaders are: it integrates scientific research, design, engineering construction, production and management, and is detached and self-contained. Its dominant position in the world glass industry has not been shaken so far. Their "going out" is out of a long-term business development strategy, is the technology and capital overflow after their own strength, and adheres to the business philosophy of gradual and rolling development

looking at ourselves, do we have a first-class company that can compete with the West in technology, capital, talent and comprehensive strength, and is enough to gallop in the world glass market? No, At best, we are getting bigger, which is far from being stronger. Now, the vast majority of enterprises want to "go out", in fact, it is passive, it is "transfer" rather than "transformation". It's just an expedient measure to try abroad when the domestic market is bad, and the entry point from the beginning is basically the low-end market abroad. If such a business philosophy is adhered to, there is likely to be a short-sighted behavior of staying if you can get a vote and withdrawing if you can't do it, which will eventually leave a mess abroad that is difficult to clean up

aerogel gel insulation board therefore, the leading step of "going out" should take the lead in realizing the "transformation" of business philosophy, realizing the transformation of long-term development strategy of the enterprise, abandoning immediate interests and focusing on long-term development; In addition, we should make full use of the enterprise structure and successful experience of western multinational glass groups to move closer to world-class enterprises, so that "going out" is no longer an expedient measure, but a natural thing

third, has there been careful consideration of security risks

nowadays, the system oil leakage of hydraulic universal testing machine is relatively serious in the world. Although peace and development have been emphasized all the time, the international political and economic situation is complex, the game between major countries has never stopped, the hot spots of military and religious conflicts continue, and the security situation in some regions is not optimistic. Therefore, regional security issues are still the key elements that foreign investors need to consider. Now it seems that the glass market in the relatively safe and stable countries and regions in the world has been basically carved up by western multinational companies. The remaining regions are either extremely underdeveloped or extremely unstable, and some may even break out in war at any time. Facing a seemingly tempting market, should we carefully consider: pie? Trap

we still take Nigeria as an example. As a populous country with certain influence in Africa, its glass market has certain development potential, which is beyond doubt. How smart are the western multinational glass companies? Have they always turned a blind eye to this? It can be said that the reason why so many western multinational glass companies have not been involved in Nigeria must be the result of careful consideration, because so far we can still see that the Boke Holy Land in the north of the country is in a fierce battle with the government forces, corruption is rampant, and the political ecosystem is chaotic. In the face of such chaos, Western companies will definitely flinch, because it is beyond their risk control

of course, having risks does not mean that we must not invest. Chinese people have never lacked courage, but the key is to think before making investment decisions: is the grasp of investment timing accurate? Is the risk control plan complete? Is the scale of investment appropriate? Can you bear the worst situation

in short, once there is unrest in the target country of investment, foreign investors are bound to become the first victims, and such examples abound. If we choose the wrong direction due to oversight, who can guarantee that we can retreat completely

fourth, have you done sufficient research on the soft investment environment

as a mature overseas investment behavior, we must fully understand and demonstrate the national soft environment of the investment target. The so-called soft environment refers to the objective conditions other than the production and operation of the enterprise itself, especially the local culture, humanities, laws, systems, government behavior, etc. otherwise, a little carelessness will make itself in trouble or even desperate. For example, the Chinese funded Myanmar hydropower project was suspended due to local people's protest against environmental damage; Sri Lanka port China investment project was stranded due to the change of government; China Railway Construction Saudi Arabia light rail project was delayed due to the refusal of local people to relocate, causing heavy losses of several billion yuan Without exception, these projects are affected by the soft environment, and the lessons are profound. Therefore, when demonstrating overseas investment projects, the glass industry needs to ask itself a few questions: how will the project construction affect the local ecological environment? Is the local legal and democratic system sound? Is the political situation stable and sustainable? Is it possible to cause the rebound or obstruction of the loss party due to the impact on the local economic ecology? Can local people be effectively employed to improve their lives

at present, sustainable development is the common vision of all mankind. Our investment behavior must conform to the world trend, seek win-win cooperation, and integrate with the local economic development. If we blindly pursue the maximization of our own interests, we will not go far, and huge risks will be encountered by chance

to sum up, in the context of China's accelerated integration into the world economy, the "going out" of the glass industry is at the right time, but we need to be soberly aware that there are also huge risks and challenges behind the opportunities. It is necessary to be realistic and pragmatic, and make solid progress. Any mentality of blind optimism and eager for quick success and instant benefit is very dangerous. I sincerely hope that our government and enterprises will work together, Coordinate and standardize investment behavior abroad to avoid risks to the greatest extent. We are happy to see the successful "transformation" of first-class glass enterprises in China as soon as possible and lead the industry to the international market. The era of real "strength" of China's glass industry is coming soon

global glass () Department

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