2013 China Coated Abrasives Industry Economic Operation Analysis

(The Deputy secretary general of China Coated Abrasives Association is delivering a report concerning China coated abrasives economic operation.)

2013 has been a tough year for coated abrasives industry due to complicated economic situation. Progressive and ambitious, abrasives manufacturers were forging ahead by consistent adjustment of industrial structure and innovation, which achieved beneficial results in profits, export sales enhancement.

1. Overall Economic Situation

According to the statistics of relevant associations, the total output of coated abrasives manufacturers in 2013 was 4.7 hundred million square meters, an annual increase of 1.81%; the output value hit 58.93 hundred million Yuan, which increased 5.71% compared to the previous year; the average price of each square meter was 12.51 Yuan at a 4.81% increase rate. As to the realized profit, the figure shows that it was 5.21 hundred million Yuan, a 19.92% increase. In general, the overall economic situation was steady and smooth.

(1) Coated Abrasives Manufacturing Related Enterprise Ranking

The first six coated abrasives manufacturers ranking by output are:

Hubei Yuli Abrasive Belts Group Co., Ltd

Fengmang Compound Material Science & Tech Group

Jiangsu Sanling Abrasive Co., Ltd

Changzhou Kingcattle Abrasives Co., Ltd

Zibo Sisha MT Coated Abrasives Co., Ltd

Dongguan Gold-Sun Abrasives Co., Ltd

Ranking by output value:

Hubei Yuli Abrasive Belts Group Co., Ltd

Jiangsu Sanling Abrasive Co., Ltd

Fengmang Compound Material Science & Tech Group

Changzhou Kingcattle Abrasives Co., Ltd

Little Sun Abrasives Co., Ltd

Hubei Baota Grinding Co., Ltd

Ranking by profit (annual increase: 25.79%)

Jiangsu Sanling Abrasive Co., Ltd

Hubei Yuli Abrasive Belts Group Co., Ltd

Changzhou Kingcattle Abrasives Co., Ltd

Fengmang Compound Material Science & Tech Group

Dongguan Gold-Sun Abrasives Co., Ltd

Pingdingshan Maliang abrasives Co., Ltd

(2) Coated Abrasives Product Enterprise Ranking

The first six ranking by output:

Sichuan S.A.D.S Abrasive Co., Ltd.

Linyi Sanchao Abrasive tools Co., Ltd

Anhui Xiongdi Abrasives Co., Ltd

Meizhou Nanyu Grinding Wheel Co., Ltd

Shanghai Woozfine Co., Ltd

Yancheng Baiwei Abrasives Co., Ltd

Ranking by output value:

Sichuan S.A.D.S Abrasive Co., Ltd.

Anhui Xiongdi Abrasives Co., Ltd

Linyi Sanchao Abrasive tools Co., Ltd

Shanghai Woozfine Co., Ltd

Meizhou Nanyu Grinding Wheel Co., Ltd

Zhengzhou White Dove Coated Abrasives Co., Ltd

Ranking by profit (a total value increase of 12.18%):

Sichuan S.A.D.S Abrasive Co., Ltd.

Anhui Xiongdi Abrasives Co., Ltd

Linyi Sanchao Abrasive tools Co., Ltd

Shanghai Woozfine Co., Ltd

Guangzhou Wenzhong Abrasive Technology Co., Ltd

Meizhou Nanyu Grinding Wheel Co., Ltd

Ranking by e-commerce products popularity:

Dongtai Abrasives Co., Ltd

Nantong Huixin Glass Fiber Co., Ltd

Zhengzhou BOSDI Abrasives Co., Ltd 

In Jiangsu province, the output value of seven coated abrasives enterprises took up 32.35% of the whole; in Hubei, the output value of five coated abrasives enterprises was 21.24% of the whole; in Henan, the output value of eight coated abrasives manufacturers formed 11.35 of the whole production.

(3) Import & Export Sales

The export & import total amount was 4.996 hundred million, a slight decrease of 0.16%. The export value remained stable increase in 2013. The export volume of exports was 65897.8 tons and the average price was 4.1 dollars per kilogram, the annual increase compared to 2012 were respectively 11.1% and -1.7%.

Export Product Structure

Primary export product was abrasive cloth, which took up 49% of total coated abrasives export volume. The value was 1.31 hundred million dollars (an annual increase of 8.21%). The quantity was 32736.8 tons (5.46% increase). Average price 4.01 dollars per kilo (4.55% increase)

Export sanding paper took up 42% (a decrease of 5.75%), 0.25 hundred million, (22.74% increase), 2064.2 tons (12.31% increase), average price: 11.97dollars per kilo (33.17% decline)

China coated abrasives are mainly export to:

Abrasive Cloth: Vietnam, America, Korean

Rate of increase: Hong Kong (30.6%), India (25.5%), Malaysia (20.5%)

Sanding Paper: India, America, Vietnam

Rate of increase: Australia (69.5%), America (61.4%), India (56.4%)

Other coated abrasives rate of increase: Russia (261.1%), British (251%), Vietnam (120.4%)

The figure shows that China coated abrasives export quantity has decreased but the export value keeps increasing, which proves that product quality is on a stable increase and have competitive advantages and market demand. Whereas, other base material coated abrasives have seen a substantial decline, which demonstrates that with the improvement of China domestic output, price war has begin to exert an influence on enterprise foreign trade profit.

An Analysis on China Import & Export Market from Abrasives Industry

2013 China abrasives export value (thousand dollars)

High energy-consuming scarce resource--common abrasives total take up 49% of export value, which remains the backbone of China abrasives export，while bonded abrasives, coated abrasives and super abrasives only take up a small part, the export value keeps a stable increase.

2013 China abrasives import value (thousand dollars)

Although coated abrasives import has declined, it remains the main category in China abrasives import, taking up 39% of the total import value.

2. Coated Abrasives Industry Economic Operation Analysis

Quality benefit improvement

Benefiting from relevant industry like auto, steel, shipbuilding, enterprises have seen an obvious improvement compared to last year. In 2013, the sales income was 550.246 million Yuan, 7.52% increase; sales profit rate was 9.48%, 15.5% increase.

Output growth was lower than value growth, main business revenue and profit being improved. The additional value continued to increase. The industry was converting from scale-oriented to benefit-oriented. There was only one enterprise that occurred deficit.

Weak in self-owned brand establishment & improvement

The average product price and customs export price show that China coated abrasives features low-and-medium grade products. There is still a huge gap in top grade products compared to developed countries. To meet market demand, enterprises are suggested to make breakthroughs in new materials, technology application, product design, brand, channel, etc.

In addition, with foreign brand swarming into China, self-owned brands are difficult to establish. In recently years, China medium-and-top grade coated abrasives consumption increase has become a focus, overseas renowned coated abrasives joining in China assembly line, which restrict China self-owned brand improvement.

Adjusting structure to cope with market demand

Recently China manufacturing industry has speeded up the pace, especially in areas of aeronautics and astronautics, military and auto that began to use automatic grinding equipment. Whatever the scale of an enterprise, those who survive have their special features. Market segment is one of the approaches to product upgrading and enterprise development.

3. A Few Suggestions

Speed up structure adjustment & industry upgrading

Encourage enterprises to enhance technology improvement and innovation, attempting to make breakthroughs in product performance, structure and function. Transform the enterprises from labor intensive to technology intensive.

Develop towards specialty, characteristics & exquisiteness

To be concrete, enterprises are suggested to develop towards product specialty, technologies characteristics and goods exquisiteness. 

Broaden sales channel via internet

The 2014 Canton Fair turnover has declined by 7.23%, which is the lowest in the recent five years. On one hand, it demonstrates the serious situation of exports; on the other hand, foreign trade enterprises shall be clear that with the rapid development of the internet, more and more orders are completed by online trade platform. Simply attending several exhibitions to get foreign trade orders for a year is no longer available. In order to keep up with the trend, China Coated Abrasives Association will cooperate with iAbrasive.com, a website platform devoted to abrasives and diamond tools market. By taking advantage of public credibility, the association will provide electronic company certificates and professional quality inspection report as well as production ability verification on online stores. With the help of specialized online platform, it is easier to make internet an important channel to develop abrasives market both in China and abroad.

4. Prospect Expectation in 2014

In general, the world economy will continue slow recovery, but unstable factors still exist. The monetary policy, investment structure and product price in bulk in many countries are full of uncertainty.

China's policy to develop national economy is to make progress while maintaining stability. Despite the pressure of excessive product capacity within some industries, the government has taken a series of measures to cope with the problem. As a result, coated abrasives industry is expected to keep a stable development with 6% increase in output, value and profit and the export scale will be the same with previous year.