In the high and low voltage electrical industry, most of the components and products are assembled and sold to users through the complete plant, whether it is the construction market, industrial market, or power market, the complete plant business has an important place. So what kind of enterprise group is complete plant after all? What are the "pain points" facing its development?

What is a complete plant

In the field of electric, complete set factory is the popular name of complete set of electrical switch equipment factory, also called plate cabinet factory or plate factory, English for "Panel Builder"(ABBREVIATED PB). Since the reform and opening up, with a large number of foreign enterprises entering China, the concept of "plate factory" is gradually well-known in China's transmission and distribution equipment manufacturing industry.

However, in China, the business model of complete plants is extremely simple cost-driven model, especially in areas with high cluster of complete plants, a large number of complete plants are small enterprises, and many of them are even family-style processing enterprises without formal qualifications.

These small complete plants, on the one hand, ignore laws and policies, when there is an order, to work 24 hours shift production, therefore, it maintains almost zero inventory, but also has a strong ability to deliver goods quickly, which is the large enterprises, state-owned enterprises, such as those in the rules can not do. When there are no orders, production stops completely, almost in a "closed" state, so the working hours of workers in these plants are extremely differentiated. On the other hand, the sales model of the complete plant is also very simple, which is the commission agent model. No matter whether the business personnel of the company or other kinds of "agents (enterprises)" outside, as long as they can bring orders to the complete plant, they will be given commissions in proportion. This simple and pure market model driven by commissions not only brings orders to complete plants, but also inevitably leads to huge volatility and randomness of sales. A senior personage of electric industry open finish smile of say: our complete set factory also call switch factory, have business to open, have no business to close!

In a word, domestic plants are mostly cost-driven "profit-seekers" who buy components, assemble them into boxes with "virtually no added value", and then sell their processed products to "various end users".

 

Ii. Status quo of complete plant

According to the data base of cerr, a professional electrical media organization, there are about 3,000 large-scale complete set plants in China at present, and according to some industry statistics, there are 6,818 enterprises in the power transmission and distribution equipment industry, including some informal enterprises, the number should be more than 10,000. According to the characteristics of the industry, the complete plant can be divided into two categories, namely, high voltage complete plant and low voltage complete plant. Uhv and UHV products have higher technical content, higher production cost and larger investment scale requirements. Therefore, the high voltage complete set plant has higher industry entry barriers, higher market concentration and higher guarantee of corporate profits. In contrast, low and medium voltage products have low production requirements such as technology, capital and scale, leading to a large number of enterprises in this sub-industry, uneven product quality, fierce competition and lower and lower average profit level.

With the development of the market and the upgrading of technology, domestic complete plants are mainly faced with the following major development problems:

 

(1) It is more and more difficult to take orders

At present, the complete plants distributed in Wenzhou, Yangzhong, Changshu, Zhenjiang and other regions as representatives, due to the large number of enterprises in the same industry, serious homogeneity, between them the price competition is extremely fierce, frequent personnel flow, cross OEM complex. At the same time, the pressure of the real estate construction industry increases, which makes the complete plant face huge pressure of market sales, and the fluctuation of business is great.

 

(2) Great financial pressure and prominent cash flow problems

At the same time, the challenge facing the complete plant is the cash flow problem caused by the ripple effect of the monetary tightening policy.

As the initial stage of engineering projects basically need to advance capital, so the larger the business volume of complete plants, the greater the financial pressure, cash flow problems seriously highlighted. And now the main goal of the complete factory customer property for selling pressure is more and more big, on the sales and payment brought greater pressure to complete plant, especially now the country's financial policy increasingly severe, bank lending demand is high, the folk financing is not only the high cost, and high risk, which also cause complete factory money pressure has been on the rise, so, Now many small and medium-sized complete plant into a vicious circle: encounter big projects dare not accept, afraid of money transfer; Encountered small projects but unwilling to accept, afraid of the money will not come back.

 

(3) Technology upgrade pressure

With the optimization of power system and the rapid development of smart power grid, complete sets of equipment also show a trend of systematization, integration and intelligence. Simple assembly and imitation manufacturing in the past no longer meet the requirements of technological development, and complete sets of plants are also facing key technical transformation and upgrading problems. It is urgent to strengthen the technical design ability, function optimization design ability and system structure design ability of the overall system.

Because most of the complete plants are still small enterprises, still stay in the simple assembly process, so the technical content is not high, they want to do product development, suffering from talent and capital problems, so there is not much difference compared with other enterprises competing on the same stage, so the profit is not high.

Therefore, at present, most complete plants in China are facing the following "three pains" during their development and expansion:

1. Unstable orders and unbalanced production;

2. Great financial pressure and difficult turnover;

3, technology development is difficult, the profit is not high.

 

Third, market opportunities

 

According to industry reports, transmission and distribution equipment market growth demand is still strong.

1. Industrial policies encourage the development of transmission and distribution and control equipment industry.

2. New urbanization, rail transit investment and grid connection of a large amount of new energy have created new growth points.

3. The construction of major projects such as power transmission from the west to the east, mutual supply from the north to the South, inter-regional networking, south-to-north water diversion and smart grid will also drive the rapid development of China's power transmission and distribution equipment industry.

 

In 2015, the scale of China's power transmission and distribution market will approach 320 billion yuan, and at the same time, it will enter a critical period of intelligent, integrated, integrated and overseas transformation and upgrading.

Therefore, even if the construction market demand is not as good as in the past, there is still a lot of room to imagine the growth of plants in new business areas such as electricity and urbanization construction.

Complete sets of factory to undertake projects generally in accordance with the requirements of the owner to make quotation and scheme optimization, design institute in the original design drawings may have specific brands and models can also be without product model, and plate ark factory when making the second design can also be in the selection of products to the developer with strong recommendation, and also can to a certain extent, modify the developers of the brand.