Innovation Can Change the Destiny of Enterprises

Current status of super-hard materials enterprises

Transformation and upgrading are the needs of domestic and international development. Under the condition that world’s economy shows a downturn trend, it’s not easy for our country’s economy to keep moving in stability with GDP growing at the rate of 7.5%. 

Actually, many problems have occurred during the development of economy, such as unreasonable working structure, excess production capacity, low economic benefits, etc. Taking super-hard material industry as an example, China’s production of carbide tools and abrasives ranks first in the world, however, just referring to the scale not the power. We have a group of abrasives manufacturers, but the working efficeincy can not match with the toatal amount of the enterprises. For instance, China’s synthetic diamond production accounts for more than 90% of the world, cubic boron nitride for 60%, cemented carbide for 45%, but the economic benefits are very low. Super-hard products which are of the same quality compared with imported ones, but the price will be 2-3 times lower. In addition, the total output of more than 300 cemented carbide drill steel enterprises in China can not compete with a Sweden sandvik company.

Several reasons for the low working efficiency of the company are listed as fpllowing:

1. Increasing labor cost.

At present, most super-hard materials enterprises are faced with the same problem, that is, labor shortage. China has ever been known for its advantage of large cheap labor. However, the history now has gone far away. What’s more, we can't rely on cheap labor to obtain benefits like the past any more. What we should do is to create economic benefits through scientific and technological innovation.

2. Cost of raw materials keeps raising

Though the coat of most raw materials keeps raising, the price of the product do not fluctuate too much and some even shows a declining trend. For example, the price of diamond decreases a little, which makes small enterprises hard to live.

3. Financial difficulty

Especially for middle and small-sized enterprises, it is hard for them to loan from the bank. Some small enterprises lend money from each other, the risk of default even lead to the bankruptcy. 

4. Difficulty on producing qualified cemented carbide anvils

With the improvement of production, promoting the yield and developing the large-scale synthetic compressor tend to be the best outlets. However, cemented carbide anvils produced by China are not stable in quality and can not meet the current development needs. 

Transformation and upgrading are necessary

Entrepreneurs are encouraged to set a long-lasting developing plans for the company’s future. To seek stable development, enterprises should make efforts on improving product technology content,  setting up their own brands and adapting to market development situation.