China is an ancient civilization, and it has long been a major exporter of porcelain. China ’s English title also means “porcelain”. Now talking about the current situation of Chinese ceramics companies going out, according to industry insiders, many ceramic factories built overseas are actually outsiders who discovered the local ceramic product market potential and investment opportunities in the local business process, and switched to investing in ceramic walls Floor tile industry. This article analyzes in detail the status quo and rules of the survival of overseas ceramics companies.

 

On December 30, the news that Foshan Xinmei Ceramics (Linxiang) merged with Kazakhstan's AO Keramika Ceramics Company ("Foshan Xinmei Ceramics (Linxiang) Successfully Acquired Overseas, Has Overseas Construction Become a Major Trend?") Has triggered an industry pole Great attention. Some people in the industry expressed their willingness to learn more about the current situation of the merger and acquisition and the current situation of Chinese ceramics companies going global.

 

Tao Weiwang reporter learned during a three-hour conversation with Wu Nanchang, chairman of Foshan Xinmei Ceramics (Linxiang) Co., Ltd., that since 2014, he has spent more than three years inspecting more than 30 continents country. He gave reporters a detailed introduction of the situation of Chinese ceramics companies going abroad, and gave a lot of advice to latecomers.

1.China's overseas ceramic factories

 

Talking about the current situation of Chinese ceramics companies going abroad, Wu Nanchang told Tao Wei.com, "Now there are more than a dozen ceramic factories built by Chinese or companies overseas, with the most in Africa and more than ten, including five in Nigeria. Ceramic production enterprises invested in. But according to incomplete understanding, in the traditional sense, ceramic enterprises in mainland China only go out in Marco Polo tiles in Tennessee in the United States, Times Ceramics in Edo State in Nigeria, and New American Ceramics in Kazakhstan. And four new Zhongyuan ceramics to be invested in Uzbekistan. There are 3 joint ventures between Kodak and Guangzhou Senda Trading Company (China's largest and most extensive ceramic export company in Africa) in Africa and cooperation with Russia. One, Foshan Jinlishun Kiln Company has one in Indonesia and should belong to the domestic ceramics-related enterprise. "

 

"A small number of Chinese ceramic factories investing abroad are non-controlling in the name of an individual. For example, an investor in Shandong cooperated with locals in Iran and two in Uzbekistan. Most other Chinese ceramic factories investing abroad were originally It is non-ceramic industry. The investment in this case is relatively early and the quantity is large. "Wu Nanchang believes that domestic ceramic factories invest less overseas, and most domestic ceramic enterprises face certain operating pressures and difficulties. There is a certain relationship between the extra effort in laying out the "going global strategy".

 

According to Wu Nanchang, at present, many ceramic factories built overseas are actually outsiders who have discovered the local ceramic product market potential and investment opportunities in the course of doing business in the local area, and then switched to investing in the ceramic wall and floor tile industry. Among them, Sun Jian, the owner of Zhejiang Wenzhou, invested in Wangkang Ceramics in Nigeria, Pengsheng Ceramics invested by the boss in Wenzhou in Uzbekistan, Nigerian ceramics represented by the owner of Fujian Huang, Guangzhou Sunda Trading Company invested in Kenya, and Jiangxi Gaoan Zhu The owner of Riya Ceramics in South Africa is praised by the domestic ceramic industry.

 

Among them, Wangkang Ceramics has 5 large and medium-sized production lines in Nigeria, and has already set up new ceramic factories in 3 African countries outside Nigeria. The momentum is very strong.

 

Pengsheng Ceramics has worked hard in Uzbekistan, motivating Wenzhou people in other industries to invest in electronics, cables, leather and other projects, and to develop a two-line ceramic factory into an industrial park, which has been rewarded by the Chinese government for hundreds of millions of dollars. Uzbekistan The Stein government listed Pengsheng ceramic products as the national ceramic purchase list.

 

Time Ceramics has two 65,000-square-meter porcelain production lines in Edo State, Nigeria. African blacks are working faster on the classification line than disco jumping. They are also said to be investing in Cameroon and West Asian countries.

 

With the support of Kodak, Guangzhou Senda Trading Co., Ltd. put into production in Kenya and then invested in ceramic factories in 2 African countries including Tanzania in East Africa and Ghana in West Africa.

 

South Africa's Ruiya Ceramics has overcome the initial difficulties of building a factory and is in the second phase of the project.

 

Now the ceramic industry in Africa is basically the world of Chinese non-traditional ceramics. Except for Wangkang Ceramics and Times Ceramics in Nigeria, Jiani Ceramics and Jiali Ceramics invested by Shandong people, and Dong's Ceramics invested by Hong Kong bosses are all developing very well.

 

2. Chinese ceramic equipment manufacturers go abroad

 

Chinese companies continue to invest and build factories overseas. At the same time, Chinese ceramic equipment manufacturers have also gone abroad.

 

"Four years ago, China's ceramic machine equipment basically did not output the entire line from raw material milling to product packaging." Wu Nanchang said that at present, Chinese-funded factories use equipment provided by domestic manufacturers, which has driven ceramic machine equipment manufacturers. Actively going global has also increased its global visibility.

 

Foreign ceramic manufacturers have always respected Italian equipment for many years. Some foreign ceramic enterprise bosses actually understand the advantages of Chinese ceramic machinery now, but if they buy it, they will be ridiculed by their counterparts in the country. When China's large-volume, large-scale, high-quality, and low-price products enter a country, ceramic companies in that country generally collectively encourage the government to use anti-dumping policies on the grounds of protecting the country's manufacturing industry, thus being partial. However, when Chinese investors compete with them in the same place with high-quality and inexpensive domestic-made ceramic equipment, they will face the seriousness of the consequences and take the initiative to change. In order to survive in competition, foreign investors have also started to accept and recognize Chinese ceramic equipment, and foreign manufacturers have gradually increased their purchase of Chinese ceramic equipment. This will undoubtedly provide a broader market for the development of China's ceramic machinery industry in the country.

 

According to incomplete statistics, among the ceramic equipment currently exported in China, Kodak, Henglitai, and Sacmi China are the main presses, and the furnaces are mainly Kodak, Zhongpeng, Modena, Huaxin, and China. Kilns and several others. In terms of glaze lines, Xin Jingtai, Hope, Mika, and Strategy have done a lot. In terms of raw material processing equipment, it is Foshan Haofeng and Jiaruifeng. Other auxiliary equipment, such as Saindi, Whirl and so on.

 

Pakistan is referred to by China as the "Pakistan Iron", but ceramic anti-dumping sticks are the highest in Asia except India and Iran. Wu Nanchang told Tao Weiwang that the president of the Pakistan Ceramics Association secretly imported a batch of polished tiles from China earlier this year to enrich his company's product support. After being discovered by Pakistan's ceramics production colleagues, the other five ceramics factories agreed Action, dismissed his chairman. This is still the case in Pakistan, and other major ceramic producers can imagine.

"Since 2014, Xinmei has spent more than three years visiting more than 30 representative countries on four continents (Africa, America, Europe, and Asia), and comparing all aspects of investment one by one. Finally, Xinmei chose to invest in Kazakhstan after choosing an investment analysis model and a comprehensive evaluation of various aspects. "Wu Nanchang told Tao Weiwang reporters:

 

First, Kazakhstan is traditionally friendly with China.

 

China's Belt and Road Initiative was formally put forward by President Xi Jinping in a speech at the University of Kazakhstan in September 2013. Kazakhstan is the first stop of the ancient Silk Road in China and an important node of the modern Silk Road economic belt. Kazakhstan's political situation has been stable for a long time, its economy has developed rapidly, and its public security environment is very good. Real estate is in its infancy, but its per capita GDP is higher than that of China, and its purchasing power is strong. More than 90% of domestic wall and floor tile products rely on imports, and the market price is high.

 

Second, Kazakhstan has very favorable conditions for ceramic production-energy and raw materials.

 

Energy prices vary across Kazakhstan. Aktobe has the lowest energy prices in the country due to its abundant oil and gas resources. The PetroChina Kazakhstan project location is also in Aktobe. The average price of electricity in each period is converted into RMB, less than half that of China, and the price of natural gas is converted into RMB, which is about 20% of China. This is undoubtedly an irresistible advantage in the ceramic industry where energy costs account for more than 50% of total production costs.

 

Wu Nanchang said with a smile, in fact, the energy prices of nearly 30 countries visited by Xinmei have advantages over China, and Kazakhstan is not the cheapest in this regard. In addition, Kazakhstan basically has no ceramic industry and no ceramic raw material suppliers. However, near the city of Kromt in Aktobe, there are abundant ceramic raw materials storage. It's also cheap.

 

Third, although the company is in Kazakhstan, it actually targets the Russian and Eastern European markets. Russia plus Eastern Europe has a population of more than 400 million, and there are not many ceramic companies.

 

Aktobe is less than 100 kilometers from Russia and 1,200 kilometers from the Moscow Railway. It is also less than 3,000 kilometers from the most populous countries in Eastern Europe, Poland, Western Europe, Germany, France, Italy, and the United Kingdom. Eastern European countries, the product shipping costs are not too high, however, the product market price is not low. Moreover, Kazakhstan, Russia, and Belarus are three countries' customs union, there is no tariff between each other, and they are a unified market.

 

Fourth, in order to develop its own non-oil and gas industry, Kazakhstan vigorously builds a modern industrial system, and provides very preferential support policies for foreign investment.

 

Of all the countries inspected by Xinmei, except for the United Arab Emirates, Saudi Arabia and Oman in the Middle East, Kazakhstan has given the largest tax exemption and support.

 

Fifth, the existing ceramic enterprise in Kazakhstan has equipment and workshops vacant, saving investment time and investment funds for the Xinmei Company ’s Belt and Road project.

 

The existing production line was slightly modified to increase the production capacity to 10,000 square meters per day, and it could be put into production operation after six months, providing time and space for subsequent investment in personnel training and gradual market development.

 

However, Wu Nanchang introduced that the project is of little significance as a case and experience of Chinese ceramic enterprises going abroad. In the world outside China, there are very few foreign ceramics companies that have ceased production and have opportunities for mergers. Chinese ceramics companies have gone global through M & A. This project is currently the only one in China.

 

Because the project not only introduced investment, but also invigorated an enterprise in Kazakhstan, and also solved the employment of more than 500 locals, it was strongly welcomed and valued by the government. In particular, the local state and municipal governments held special research conferences to organize the implementation of various national tax incentives for the investment of the project by the Kazakhstan Investment Committee to Xinmei Corporation, and the 14 support measures proposed by Xinmei Corporation to the local government Claim.

 

According to the reporter's understanding, the project of Xinmei Company has been included in the national key investment project of Kazakhstan. The preferential policies granted at the national level include:

 

1. After the project is put into operation, the income tax will be 0% for 10 years, the land tax for 0 years will be 0%, and the property tax for 8 years will be 0%.

 

2. Within 5 years of the project's implementation, the customs duty and import value-added tax of imported equipment and equipment accessories as well as the import of raw materials are 0%.

 

3. The State provides matching in-kind subsidies (land, plant or infrastructure) of 30% of the total investment of the project.

 

The local government's support measures are focused on ensuring the supply of water and electricity, winter heating, business raw material mining permits, work visas for Chinese technical and managerial personnel during construction and project production, public security management, and railway restoration.

After inspecting nearly 30 countries, Wu Nanchang kept in-depth understanding of China's Belt and Road construction. So, what are some suggestions and reminders for more and more ceramic companies going out in the future?

 

He thought for a while and said that, subjectively, as a ceramic man, I hope to see the voices and products of Chinese ceramics companies all over the world, and make China known as porcelain more famous. Manufacturing industry is stronger. However, real society does not change with individual will.

 

Therefore, if you go out to investigate and finally decide to invest, in the foreseeable future, you should also pay attention to the following issues:

 

1. In the investment areas of the ceramic industry, the economic development and the people's livelihood of most countries are still far behind China. Attention should be paid to the state relations between the investing country and China, traditional folk friendship, political stability, opposition parties, anti-government organizations and anti-government armed forces and public security. Also pay attention to the stability of the currency of the host country and the degree of foreign exchange control. Sometimes, money is made during production, exchanged through the black market, and China loses money.

 

2. For countries with a more developed economy than China, attention should be paid to the state's industrial policy orientation, environmental protection policies, labor regulations, the strength of trade union organizations, and tax policies.

 

3. The above two points are the first weighing factors. Don't always put the national population (actually market capacity) and production cost factors first. Cost is not everything. When inspecting, always compare with China's production cost in mind, in fact, other colleagues in the country where the investment is located have the same conditions as yours. In addition, they have many advantages such as local connections.

 

4. The political situation and ruling parties in foreign countries cannot be as stable as China. Pay attention to relationships with people from various parties and parties. Those who are not important to you today may decide everything about you tomorrow.

 

5. When you don't know the other party well, don't easily cooperate with local people to invest or lease their important properties. The funds are not enough, but you should slow down the pace of development. The Chinese are afraid of things and are willing to spend money on disaster relief, which is famous all over the world. To prevent partners from provoking commercial disputes in the future, leading to investment failure or greatly reduced benefits.

 

6. The management methods of Chinese ceramics enterprises may not be effective in foreign countries, because the management people and the social environment are different.

 

7. Although there is a translation, it is impossible to be around at any time. Investors need to consider the long-term inadequacy of social, cultural, and living environments, as well as loneliness.

 

8. It is fast to build a factory in a foreign country, from flat land to production in 2 years. China's speed model is not suitable for countries other than China.

 

9, investment construction and production and management, all work must be standardized. Once the local laws are seriously violated, the company is fined and the investor or legal representative is deported, you can only remote control in your home country.

 

10. Do more philanthropy and establish a good social image of foreign investors. Caring and caring for local employees, at least make them feel that you really care about them and then care about money, not the other way around.