Source: CPPIA (China Plastics Processing Industry Association)
In 2019, despite the complex situation where risks and challenges both at home and abroad have increased significantly, the plastics processing industry adheres to the new development concept, focuses on the supply-side structural reform, and uses scientific and technological innovation as the driving force to accelerate structural adjustment and promote sustained and steady growth. The industry achieved a steady and progressive development. At the beginning of 2020, due to the impact of the pandemic COVID-19, China's economy will see a significant decline in the short term, but the trend of steady development and long-term improvement does not change, according to analyses.
2019 Review of China Plastic Processing
1. Keep stable & make slight progress
(1). Main economic indicators continue to grow
In January-December 2019, the national aggregate output of plastic products reached 81.841 million tons, an increase of 3.91% year-on-year. The operating income of 15835 plastic enterprises above designated size was 190.7748 billion yuan(about US$ 27B), an increase of 2.77 year-on-year, accounting for the operating income of all national industrial enterprises above designated size 1.8%. They realized profits of 105.452 billion yuan(about US$ 15B), an increase of 12.68% year-on-year, accounting for 1.7% of the realized profits of all industrial enterprises above designated size in the country; operating income profit rate was 5.53%. According to preliminary estimates, from January to December 2019, the cumulative export value of plastic products was US$74.933 billion (about US$ 10.7B), a year-on-year increase of 7.94%. The main economic indicators of the industry continued to grow.
(2) Keep an improving trend, with a remarkable profit increase
In 2019, under the synergy of technological progress, structural optimization, relatively stable raw material prices, the implementation of tax reduction policies, robotization and the scale advantages of large enterprises, the total profit of the plastics processing industry gained a significant increase of 12.68% year-on-year.
(3) Achievements in structural adjustment
In 2019, the plastics processing industry eliminated obviously backward production capacity and accelerated product transformation and upgrading. The industry has vigorously implemented measures such as the three-product strategy and gradually transformed into high-end, branded, and green. For example: the battery separator industry expands the production capacity of high-end products; the plastic wiring equipment industry accelerates the development and utilization of five high-end special materials for general plastics, and accelerates the industrialization of modified composite plastics, special engineering plastics, and alloy materials; and the plastics additives industry companies carry out product structure Adjustment; companies in the rotomolding industry first introduced nylon rotomolding materials to replace imports and have applications in construction machinery fuel tanks and other fields; high-end polyester film domestic products can replace imports, and the number of imports has been further reduced; artificial leather and synthetic leather has accelerated the elimination of backward production capacity. The production of eco-type synthetic leather using environmentally friendly materials such as waterborne polyurethane has increased; the proportion of technologically innovative products has continued to increase, further advancing the structural adjustment and transformation of the plastic industry.
(4) Further industry concentration
The number of enterprises above designated size in the plastics processing industry has grown steadily. At the end of 2019, there were 15,835 enterprises listed on the regulations, an increase of 264 from the end of the previous year, with a growth rate of 1.7%. In the plastics processing industry, the development of leading enterprises with larger scale and better overall quality is accelerating and the number is increasing, and their corresponding market comprehensive competitiveness is also gradually improved; the development of small-scale and low-tech enterprises has encountered difficulties, and some Stop production or change production. Orders are increasingly being transferred to large enterprises with strong strength, standardized management and excellent quality. The industry continues to show a trend that the stronger are stronger and the weaker are weaker. The allocation of resources is also tilted towards advantageous enterprises, and the industrial structure is further optimized.
(5) The industry's overall innovation awareness is enhanced
The overall innovation awareness of the industry has increased, and the market demand for high-end products has grown. Technological innovation, improvement of craftsmanship, and consumption upgrade continue in the industry. Enterprises focus on innovation and transformation, equipment upgrades, machine substitutions and advancement, labor reduction, cost reduction, and improved management efficiency, which contribute to high-quality development.
2. Take multiple measures to overcome difficulties
In 2019, China's plastics processing industry overcomes the adverse situation of Sino-US trade frictions, structural excesses of some products, strict environmental protection, and negative public opinion on plastic waste. Multiple measures were taken to overcome difficulties and promote continuous progress of the industry.
(1) Active response to Sino-US trade frictions and maintain export stability
Starting from May 10, 2019, the United States imposed a tariff of 25% on imports of US$200 billion from China that originally was 10%. According to the Chinese royalty number, there are 36 tariff codes involving plastic products, accounting for 60.45% of 2017 exports. The United States is the largest importer of China's plastic products, and the increase in tariffs has a huge impact on exports. Industry companies actively responded and took various measures to stabilize exports. With the joint efforts of the industry, although the value of exports to the United States declined slightly in 2019, the overall value of exports achieved a large increase.
(2) Vigorously promote ecological construction and promote green development
At the beginning of 2019, the General Office of the Hainan Provincial Committee and the General Office of the Provincial Government jointly issued a document announcing that the production, sale and use of disposable non-degradable plastic products will be completely banned within a certain period of time in Hainan Province. At the end of the year, the Sixteenth Meeting of the Standing Committee of the Sixth People’s Congress of Hainan Province adopted the “Provisions on the Ban of One-Time Non-Degradable Plastic Products in the Hainan Special Economic Zone”. Many countries and regions in the world have also proposed to ban the use of disposable plastic products such as plastic bags. The problem of plastic pollution has received unprecedented attention, and there have been many negative reports in the media. On the basis of calling on people to use plastics correctly and scientifically recycling and disposing of disposable plastic products, the industry has carried out the development and utilization of biodegradable materials, reducing the reduction of disposable plastic products, reducing carbon emissions, and promoting the recycling of waste plastics. A lot of active and effective work.
CPPIA undertook the "Plastic Ecology Construction Sub-Forum" of the China Engineering Science and Technology Forum "Polymer Sustainable Development Engineering Technology Forum", held "Plastic Ecology and Green Technology Innovation System Construction" series of activities, and held "China-Japan Ocean "Plastic Pollution Response Symposium", through similar related activities, actively lead and promote waste plastic prevention and plastic ecological construction, advocate that all sectors of society should reduce the production of waste plastics from production, application and recycling links, and call on the society to correctly understand, The media scientifically reported the problem of waste plastic pollution.
(3) Expand new applications and create new needs
In 2019, the industry will actively expand new application areas and create new demand and new economic growth dimensions. Under the background of the downturn in the real estate industry, under the promotion and influence of relevant national policies, industries such as plastic pipelines have deployed the “Belt and Road”, sponge city construction, smart city underground pipe network and comprehensive pipe corridor construction, clean energy utilization, prefabricated construction, Black and odorous water treatment, rural water conservancy construction, rural human settlement environment improvement, etc., gain new market space. The application market of EPS wall insulation board is light, and it actively develops innovative application markets such as integrated boards, floor heating, and sound insulation boards, and has achieved good results. In 2019, the production and sales of automobiles decreased, and the overall consumption of rigid and soft polyurethane foam for vehicles (excluding refrigerated vehicles) declined year-on-year, but polyurethane actively explored new markets and achieved growth in other applications. In the context of insufficient market demand, the artificial leather and synthetic leather industry is still actively expanding new uses to promote ecological and fashionable synthetic leather and other high-end synthetic leather to gradually become the mainstream of the market.
(4) Promote intelligent processes, reduce costs and improve quality
Plastic processing costs, especially labor costs, continue to increase, and the shortage of skilled workers and difficulties in recruiting workers have become more prominent. In order to reduce labor costs, improve product quality, and create greater profit margins, the plastics processing industry actively promotes machine substitutions, shifting from labor-intensive to technological innovation. For example, the plastic wiring equipment industry has gradually realized the automation of production, powder, and feed equipment. The artificial leather and synthetic leather industry has consciously adopted and practiced intelligent manufacturing. There has been a new growth. Plastic household goods companies have learned to model "close to unmanned intelligent injection molding workshop" To improve the level of intelligent manufacturing.
1. Industrial structure adjustment will keep a good momentum
With the further increase of industry concentration in 2020, the polarization of the stronger will continue, and market share and profit growth will be further concentrated in advantageous enterprises and new industries.
2. product export and capacity output will be coordinated
On January 15th, China and the USA signed the first phase of the economic and trade agreement. The USA canceled the tariffs originally scheduled to take effect in December and reduced the tariffs imposed on US$120 billion of Chinese goods on September 1 to 7.5%. Although the signing of the economic and trade agreement prevented the continued escalation of the trade friction between the two nations in 2020, the 25% tariff imposed on Chinese goods worth US$250 billion remained unchanged, and difficulties in exporting to the American markets remained. The plastic products industry should aim at emerging international markets, carry out extensive international cooperation, diversify development, from product exports to output capacity, and promote the expansion of market space for plastics-related industries.
3. Deeper implementation of the "QVB" strategy
With the development of society and economy, the requirements on downstream suppliers have become more standardized, forcing enterprises to standardize production, and promote enterprises to implement the "QVB" strategy. In the future, the industry must adapt to the market orientation of high-end, personalized, small batch, and individual customization, promote the rapid growth of new production models and new formats, and vigorously cultivate new economic growth points. Industry companies have also strengthened collaborative innovation in the industrial chain, researching and developing new materials, and improving product performance. By Improving Quality, Increasing Variety, Creating Brands("QVB" strategy), promote the spirit of craftsmen, advocate the manufacture of high-quality goods, promote the transformation and upgrading of the industry, and realize the transformation from big to strong.
4. Accelerate the promotion of ecological construction and green sustainable development of the industry
The 10th meeting of the Central Committee for Comprehensive Deepening Reform held on September 9, 2019 reviewed and passed the "Opinions on Further Strengthening the Treatment of Plastic Pollution". The meeting pointed out: Actively respond to plastic pollution, we must firmly establish a new development concept, and orderly prohibit and restrict the production, sales and use of certain plastic products, actively promote recyclable and easily-recyclable and degradable alternatives, increase the supply of green products, standardize the recycling of plastic waste, establish and improve management systems at all links, and effectively and effectively control plastic pollution. Plastic industry personnel actively participate in making a difference. Looking forward to 2020, the industry's ecological construction and green sustainable development will accelerate. In the production field, we must improve industry self-discipline, adhere to green and environmentally friendly production, and reduce the disorderly discarding of plastic particles and finished products from the production, transportation, and sales of plastic products; advocate the society to use plastic products scientifically and rationally, and promote plastic products many times. Use and plastic packaging recycling; the recycling and recycling field should actively and scientifically promote the garbage classification system, improve the collection and disposal of plastic garbage, strengthen the scientific and systematic management of the recycling and utilization of waste plastics, and form a long-term mechanism.
5. Policies help relax the impact of COVID-19
The outbreak of COVID-19 in China during the Spring Festival has caused a certain degree of impact on the production, and the plastics industry needs to actively respond. At present, it has no impact on the enterprises producing epidemic prevention related products, but has a relatively large impact on those of other products. The restart and production of enterprises, personnel, transportation, raw material supply and capital, etc. almost every aspect has suffered. Recently, ministries and commissions and local governments have successively issued relevant policies, involving finance, taxation, human resources, etc., to encourage the industry to resume work and production, help solve industry difficulties, and strive to minimize the impact. The analysis of the impact is phased. With the improvement of the pandemic situation, the stimulus of policies, and the recovery of the market, 2020 will be a year of steady development and long-term improvement of the industry.