The gorgeous transformation of China Building Materials
- Categories:Industrial Trend
- Time of issue:2018-08-28 08:26
The gorgeous transformation of China Building Materials
(Summary description)Editor’s note Recently, "Excellent" magazine published the article "The Gorgeous Transformation of Chinese Building Materials" and an interview with "Song Zhiping: From Chinese Building Materials to Chinese Materials", answering a question of concern inside and outside the industry: China National Building Materials Group is occupying China and the world After the commanding heights of the building materials industry, is there room for further growth? Chairman Song Zhiping's strategic layout and China National Building Materials Group's innovative practice gave a positive answer to this.
- Categories:Industrial Trend
- Time of issue:2018-08-28 08:26
Editor’s note Recently, "Excellent" magazine published the article "The Gorgeous Transformation of Chinese Building Materials" and an interview with "Song Zhiping: From Chinese Building Materials to Chinese Materials", answering a question of concern inside and outside the industry: China National Building Materials Group is occupying China and the world After the commanding heights of the building materials industry, is there room for further growth? Chairman Song Zhiping's strategic layout and China National Building Materials Group's innovative practice gave a positive answer to this.
If occupying the strongest position in the industry, obtaining the highest market share, and the best profit performance are the criteria for measuring the success of an enterprise, China National Building Materials Group Co., Ltd. (hereinafter referred to as CNBM) has done it.
In the past few years, China National Building Materials has achieved the world's number one position in cement, international cement engineering, waste heat power generation, gypsum board, fiberglass, wind power blades and other fields through continuous reorganization across the country.
Throughout 2017, China National Building Materials' total operating income rose to 300 billion yuan, and the profitability of its six major product systems has increased in varying degrees. The integration and reorganization of the subdivision of building materials and the optimized layout have all received real money in return.
In the huge cement industry, China National Building Materials has achieved an annual output of 530 million tons of cement and 400 million cubic meters of mortar concrete through long-term firm operation. The joint and reorganization model that has been continuously promoted over the years has allowed CNBM to put an end to the complicated competition pattern of the Chinese cement industry for many years with almost its own efforts, and has driven the industry away from a long period of meager profit.
When cement prices continue to rise across the country, the profits of BNBM (000786.SZ) and China Jushi (600176.SH) have grown rapidly, when China National Building Materials (3323.HK) and Sinoma (1893.HK) are listed on the Hong Kong Stock Exchange. Smooth integration, when new cement projects are being built in the "One Belt One Road", a new question arises: after such a large industrial group occupy the commanding heights of China and the global building materials industry, is there room for further growth?
The answer given by Song Zhiping, chairman of China National Building Materials, is yes. He saw that for CNBM, the most important task at this stage is to find brand new breakthroughs and broader development space after establishing a strong position of traditional building materials, so that a relatively traditional building materials company can continue to accelerate. New kinetic energy".
In an exclusive interview with a reporter from Yingcai, Song Zhiping referred to this change as the "three pillars", which means that cement business, international engineering service business and new material business must achieve common development. He believes that the most important work of the entire group in recent years is to "go all out to make new materials."
The cement king's self-change
In the first half of 2018, the biggest keyword related to the cement industry was “price increase”. Some people think that this is driven by the boom in real estate sales in second and third tier cities, while others believe that this is due to stricter environmental protection policies leading to insufficient supply. But in Song Zhiping's view, these are not the most comprehensive answers.
In 2017, he once told reporters that through joint reorganization, the concentration of China's cement industry will increase, which will inevitably make the entire industry more stable, thereby driving the improvement of corporate profits. In the past few years, China's building materials-led industrial reorganization has reaped great returns for the entire industry.
At the same time, he also clearly realized that with the changes in China's infrastructure construction and urbanization process, the golden age of cement is gone forever, and the use of cement in the whole society will decline after a plateau period.
Benefiting from its strong competitive advantage in the industry, CNBM will not lose its profitability. On the contrary, China National Building Materials, the global "cement king", can still earn a lot of profits as the industry's focus slowly shifts downward in the next five years.
Many investors are also aware of this. In December 2017, China National Building Material Co., Ltd., a Hong Kong-listed company under China National Building Materials Group Co., Ltd., and China National Materials Co., Ltd. held shareholder meetings and jointly announced that the merger of China National Building Material and Sinoma was approved by the shareholders meeting. What is shocking is that the approval rate of shareholders of both companies exceeded 99.9%.
It is important to know that the Hong Kong market itself is a market that values the rights and interests of small and medium shareholders. In a large number of mergers and acquisitions, small and medium shareholders will frequently vote against it, which is obviously different from A shares.
"Because the threshold in Hong Kong is very low, if the minority shareholders disagree with more than 10%, the integration will be rejected. Although 10% is a relatively small number, there is a probability of being rejected, especially for Sinoma. Two hundred million Hong Kong dollars worth of small shareholders can reject the entire case.” Song Zhiping said.
In order to more fully introduce the benefits of integration to investors around the world, Song Zhiping did a lot of preparatory work, including roadshows in Hong Kong and the world, and finally won the approval of almost all investors of the two listed companies. But the most important thing is that the restructured CNBM has strong enough profitability to support the enthusiasm and expectations of investors.
Since the rebound in December 2017, the share price of China National Building Materials has risen from a price of around 3 yuan to a maximum of nearly 10 yuan. It only fell to above 7 yuan in early July 2018. Under these increases, China National Building Materials is still only P/E ratio of 13 times and P/B ratio of about 1 times. Obviously, this rise is driven by real performance support.
In addition, after the large-scale integration of China National Building Materials, internal costs have been continuously reduced and the corporate structure has been improved. After the completion of the "big two materials merger" with Sinoma, the headquarters of the two sides totaled 27 middle-level departments, which were directly reduced to 12 middle-level departments, and the original 33 second-level units were reduced to 13. Throughout the process, CNBM is very resolute in preventing the two companies from simply adding together. Instead, they continue to smelt, integrate, and optimize internally. This is as important as the external environment where the industry concentration increases and the competition intensity decreases.
"Benefits have increased greatly, stocks have soared, investors are rejoicing." Song Zhiping concluded.
Create an invisible champion
Cement is the most obvious label of China Building Materials, but it is not the only label.
Specialization and diversification have always been an important controversy in the strategic setting and layout of enterprises. From the point of view of supporters of specialization, a company should concentrate on making a product more refined and thorough. Diversification means decentralization and overdraft of corporate resources.
But with the development of the times, the diversification model has derived many new changes. Related diversification is prevalent in large industrial groups and Internet platform companies. CNBM has become a model of successful diversified operation due to the particularity and huge size of its central enterprises.
Especially the forward-looking layout of China National Building Materials in the field of new materials has become the most critical new driving force supporting its continued development and growth in the next 20 years.
The earliest success of China National Building Materials in new materials was through the method of mixed ownership reform to control China Jushi (600176.SH). After the merger of the two materials, it also owns another Taishan fiberglass, which is the second largest in the country in terms of production capacity. Together, these two companies account for more than 50% of the domestic glass fiber market.
The data shows that Taishan Fiberglass achieved a net profit of 822 million yuan in 2017, and the industry leader China Jushi achieved a net profit of 2.15 billion yuan in 2017, an increase of 41.34% year-on-year. The two together contributed nearly 3 billion yuan to China National Building Materials Yuan profit.
Although people do not see the existence of glass fiber in daily life, it is not an exaggeration to say that almost everyone is a customer of China Jushi and Taishan Fiberglass. Similarly, the gypsum board of BNBM, a subsidiary of CNBM, also occupies about 60% of the domestic market share, quietly hidden in the wall and roof decoration of every household, bringing CNBM profits of more than 2 billion yuan.
In these areas, China National Building Materials has achieved the largest market share in the industry, and has mastered a certain market pricing power, becoming a well-deserved "hidden champion."
Glass fiber is one of the earliest layouts of CNBM in new materials. Subsequently, China National Building Materials has planned and deployed "five new materials", including carbon fiber, electronic information display glass, photovoltaic materials, high-grade power battery separators and industrial ceramics used in bearings. Among these five important new material fields, China's supply of building materials has ranked first in the country.
Sinoma Technology (002080.SZ), a subsidiary of the former Sinoma, is the main platform of CNBM in the field of power battery separators. The company’s chairman Xue Zhongmin told reporters that the production of high-end lithium battery diaphragms has always been a part of China’s lithium battery industry chain that cannot be replaced by localization. A long-term plan with an annual output of 400 million to 500 million square meters.
"Lithium materials are the most mature power battery technology, and it has not yet reached the explosive period." Xue Zhongmin said that Sinoma Technology has regarded lithium battery separators as the most important pillar business of Sinoma Technology in the future.
Whether it can be mass-produced, Song Zhiping attaches great importance to it. He regarded it as the most important difference between CNBM's new materials and other companies, and it is also the most critical feature of CNBM's new materials industry at the current stage. At present, CNBM is actively pursuing large-scale mass production in these five businesses, which is very similar to CNBM's situation in the fields of glass fiber and gypsum board.
"In China, the supply in these markets is the first, because CNBM was the first to realize large-scale production and mass production, and it also needs to highlight the indicators of efficiency and market share." Song Zhiping told reporters that he was The requirement of the business sector is to be the first in the industry and to be profitable. This is a relatively clear feature of an industrial group.
The “hidden champions” with the highest market share and strong profitability in the field of new materials are the new force that CNBM can rely on most in the process of seeking a second breakthrough. "The transformation of China National Building Materials is very fast. In 2017, our new materials sector made a profit of 7 billion yuan." However, in Song Zhiping's view, this is only the beginning of China Building Materials' full effort in the field of new materials.
Global replication of technological advantages
According to Song Zhiping's judgment, the cement industry will still be very profitable in 2018. Although the amount of cement used is declining, it will remain above 2 billion tons in the next five years.
The stable profits brought by cement are regarded by Song Zhiping as an important foundation for cultivating the next batch of growth points. Using these profits, CNBM hopes to cultivate 5 to 8 or more business sectors. "In the future, each of these sectors will be a listed company, each with a profit of 3 billion to 5 billion."
In fact, the industry characteristics and development model of the new materials industry are quite different from those of cement. Cement itself is an industry with relatively simple production process, relatively low technical content, and more emphasis on resources and scale advantages, with a large volume. Although the new material sector is relatively small in a short period of time, it pays more attention to innovation and technology accumulation.
This means that the transformation and secondary lift-off of China Building Materials needs to move from an industry with a lower technical threshold to a new system with higher-end and higher technical thresholds. These more technical market operation models are completely different from the resource and integration model of the cement industry.
Song Zhiping's early work in the medical field, as well as the precipitation in the fields of glass fiber and ultra-thin glass, made Song Zhiping very familiar with the transition to technical thinking. He clearly sees the difference between the field of cement and new materials, because cement is the advantage of scale and needs resources, but new materials must rely on technological innovation.
"The cost of copying the factory is not high, but if you go outside to purchase new material companies and projects, the cost will be high, and some of the original technology will be very expensive." Song Zhiping said, if acquired The technology is not as good as the company’s original technology, so these acquisitions are almost completely unnecessary.
"For carbon fiber, if my carbon fiber has T1000 technology, I'm doing better than you, and you set up a factory, then why should I buy you? If I master the technology, investing in a plant is much cheaper than buying. In other words, buying a new material company is actually buying technology. But if your technology is lower than mine, why should I buy yours? This is the logic." Song Zhiping gave an example.
According to this logic, CNBM has not carried out large-scale industry integration in the field of new materials like cement. Instead, it focuses on companies with strong technical strength, such as acquiring R&D photovoltaic films in France and Germany. Technology companies, in cooperation with Jiangsu Shenying in the carbon fiber field, acquired Guoxian Technology, the owner of touch screen technology, through Kaisheng Technology (600552.SH).
After the acquisition, China National Building Materials organized human and financial resources to further enhance and improve these domestic and overseas technologies, achieve mass production, and promote and replicate them nationwide.
On January 23, 2018, Triumph Technology issued an announcement on the capacity improvement project of the thinning production line. The content shows that Bengbu Guoxian intends to invest 59.9 million yuan in the existing TFT-LCD glass panel thinning production line. Renovation to increase production capacity of 1.26 million pieces.
In the autumn of last year, China National Building Materials Group's Shenying Carbon Fiber Co., Ltd. held the "1000-ton SYT55 (T800) new carbon fiber project" commissioning ceremony in Lianyungang, Jiangsu. Through this investment, its single-line SYT55 (T800) carbon fiber production capacity increased again 1000 tons.
Prior to this, in the past 12 years, Zhongfu Shenying invested and built 4 sets of polymerization systems, 6 spinning production lines, and 10 carbonization production lines. The carbon fiber production capacity reached 6000t/a, which became the largest domestic output and the most advanced technology. Of carbon fiber manufacturers, accounting for more than 60% of the domestic carbon fiber market.
In an interview with reporters, Zhang Guoliang, chairman of Zhongfu Shenying, said that in the future, we will continue to replicate carbon fiber technology and expand production capacity in units of 10,000 tons.
Relatively mature sectors, including China Jushi and Beijing New Building Materials, are also implementing this model. China Building Materials' "technical advantage + replication and expansion" route in the field of new materials is rapidly expanding globally. Among them, what Song Zhiping values most is the new energy sector of photovoltaic materials.
The most potential photovoltaic materials
"Industry such as carbon fiber, lithium battery separators, ceramic bearings, etc., are all limited markets. But solar energy is an infinite market. Looking at the future, solar energy must replace traditional energy. This is an unquestionable direction. The future must be thin film solar energy. Replace polysilicon." Song Zhiping told reporters.
In the past two years, China’s new energy industry has experienced a wave of development. According to statistics from the Silicon Branch of the China Nonferrous Metals Industry Association, my country’s cumulative polysilicon production last year was about 240,000 tons, a year-on-year increase of 24%.
In addition, the newly installed photovoltaic power generation capacity is as high as 53.06GW. As of the end of December 2017, the cumulative installed capacity of photovoltaic power generation nationwide reached 130.25GW, of which 100.59GW photovoltaic power plants and 29.66GW distributed photovoltaic power.
These data seem to be huge, but there is still a big gap compared with the current energy consumption in the whole society. In the past ten years or so, photovoltaics have played a certain role in replacing traditional thermal power and hydropower, but more are generated through centralized photovoltaic power plants, which are more efficient and can mobilize the distributed energy productivity of the whole society. Photovoltaic is still in the initial stage of development.
After such a rapid development, the dispute over the technology route of the photovoltaic industry has not stopped. For example, monocrystalline silicon once disappeared. However, after Longji (601012.SH) launched monocrystalline products with a conversion rate of 22.71%, it has replaced the mainstream polycrystalline silicon for many years.
However, CNBM's photovoltaic materials are completely different from traditional monocrystalline silicon and polycrystalline silicon materials. They are a new process of sputtering or vaporizing rare earth metals on the glass surface to form semiconductor thin films. Although the photoelectric conversion rate of its products is only 16% so far, there is still a gap with polysilicon. However, due to the green and environmental protection of the thin-film solar cell production process, wide absorption spectrum, low temperature coefficient and low-light power generation, it has a stronger power generation capacity in practical applications. At the same time, because the power generation film is continuous, there is no polysilicon component. The gaps on the top, and therefore have a larger power generation area for products of the same area.
“You cannot fall into the circle of conversion rate when doing photovoltaic power generation. For example, when you build a photovoltaic power station in the desert, you can easily add photovoltaic panels.” Song Zhiping believes.
According to the calculations of China National Building Materials, the effective light-emitting area of thin-film solar cells is 15% larger than that of crystalline silicon solar panels of the same size, which invisibly increases the original 16% conversion rate by a step. In addition, thin-film solar cells take advantage of their low-light characteristics and are used in various types of urban buildings, including factory buildings and even office buildings, residential buildings and other buildings. This is an advantage that traditional photovoltaic power plants cannot match. .
Peng Shou, general manager of Trisun Technology Group, a subsidiary of the group, said: "The solar business is actually a glass business." After eight years of hard work, Trisun Technology relies on its experience in high-end glass research and development and its mastery of semiconductor thin film technology. In 2017, the domestic mass production of thin-film solar cells was realized, and it was the first to be used in the construction of China's building materials system.
"China Building Materials regards power generation glass as a building material product, and the power supply is actually a by-product of these building materials." Song Zhiping explained that for customers, what he buys is a wall or a building structure, and it can Obtaining additional income from electrical energy.
This model has almost subverted the original distributed photovoltaics. Previously, people could only install photovoltaic power generation panels on the roofs. The procedures were complicated and unsightly. However, if it was completely integrated into the glass curtain wall, distributed photovoltaics could be even better. Well integrated into the city and factory.
"It combines building materials, structure and solar energy, coupled with its low-light performance, the distributed photovoltaic of China National Building Materials is not so sensitive to subsidies, and its product direction is completely different from traditional photovoltaics." Song Zhiping said. .
Global technology procurement
For polysilicon, the technical threshold is actually relatively low, and quite a few companies have participated after the rise of the industry, which has directly caused a series of overcapacity crisis problems.
However, thin-film solar technology with "copper indium gallium selenium" and "cadmium telluride" as the main technical directions has higher requirements for technical strength. While this raises the barriers to entry for the industry, it also raises the difficulty of obtaining the accumulation of these precious technologies.
To this end, CNBM acquired a German company that specializes in the research and development of copper indium gallium selenium films under a French company. At the same time, it acquired a research and development laboratory under the former Siemens that focuses on cadmium telluride film technology.
The acquisition process of this French company was not smooth, because there were a large number of bidders, including Japanese companies. In the end, the French sold this important technology to CNBM, because only CNBM possessed profound expertise in the glass industry. Accumulation can better carry forward this industry.
"Japan realizes what it means for Chinese companies to get this technology, so it bids higher than ours, but French companies want these technologies to be mass-produced, so they choose to sell them to CNBM at a lower price." Song Zhiping Introduced.
In addition, in the German laboratory of CNBM, local scientists have been conducting experiments for decades in order to obtain a higher conversion rate for its cadmium telluride photovoltaic thin film technology. If the level can surpass the American FirstSolar of the same technical route, CNBM will also give generous rewards to technical talents.
Song Zhiping's emphasis on innovation and technology in the field of new materials is evident. He also pays attention to the acquisition and cooperation of domestic superior technologies, the most typical of which is the 10-year cooperation with Zhang Guoliang in carbon fiber.
For a long time in the past, the strongest carbon fiber technology was in the hands of Japanese companies such as Toray. However, Zhang Guoliang, the former chairman of Lianyungang Yingyou Textile Machinery Co., Ltd., through long-term investment and research and development, achieved technical upgrades and improvements to chemical fiber equipment Adjusted and successfully developed carbon fiber manufacturing technology.
Developed a great interest in Song Zhiping, and personally met with Zhang Guoliang to discuss the establishment of a joint venture company Zhongfu Shenying. Zhang Guoliang told reporters that he was very impressed with the first meeting with Song Zhiping. After learning about the technology of the Shenying, he made it very clear that the cooperation between the two parties must be reached.
After the successful cooperation, China National Building Materials also gave Zhang Guoliang great trust and support. According to Zhang Guoliang, in the past ten years, China National Building Materials has not sent a “plant-based executive” to participate in the product development or corporate management of Zhongfu Shenying, but the cross-ownership cooperation between the two parties is very harmonious.
After years of technical accumulation, Zhongfu Shenying’s carbon fiber technology has more in-depth accumulation and achieved larger-scale mass production. It currently accounts for 60% of the domestic market share except for the military industry. Zhang Guoliang’s carbon fiber technology from the beginning of equipment has been a great success. This year, Zhang Guoliang’s high-performance carbon fiber industrialization technology won the first prize of National Science and Technology Progress. Song Zhiping said that this is the third time that China National Building Material Group has won this award. French glass complete sets of technology and key equipment, glass fiber pool kiln drawing technology and equipment development projects have been successively obtained.
The cooperation with China National Building Materials also allowed Zhang Guoliang to deepen and promote this technical system in a healthier and faster way. He believes that it is the support and trust of China National Building Materials that allowed this carbon fiber technology to finally achieve mass production and basically have the ability to be replicated on a large scale.
From building materials to materials
For a company, success means the past. Because shareholders’ requirements for corporate growth are endless, whether it is scale or profit; while market requirements are also endless, people always have more expectations for better and newer products.
Therefore, for most companies, after climbing to a peak, it does not mean that everything will be fine. On the contrary, it may mean that they will face greater challenges: the traditional business has entered a mature period. Although the total profit is large, the growth rate is obvious Slowing down, only through upgrading or cross-border, can achieve "second lift-off".
The difficulty of this process for an enterprise is no different from a second start-up. It has very high requirements for the company’s learning ability and timing ability.
CNBM is one of the most active central enterprises in product upgrades. For more than ten years, it has been doing innovative material layouts other than traditional building materials such as cement, glass, and gypsum board, and has controlled private enterprises through mixed ownership cooperation. , Foreign-funded enterprises, smoothly integrated and burst out new value in the years of development.
This integration originates from China National Building Material's decades of entrepreneurial experience, and the training of joint reorganization, mergers and integration in the cement industry for more than ten years. It also lays a solid foundation for technology tolerance, innovation and promotion. .
When choosing new businesses and new technologies, Song Zhiping would ask his subordinates to analyze and think about some questions. He called them the "Four Questions": Does this technology have advantages? What are our advantages? Is there market space for this new business? For state-owned enterprises, they must do business in those areas where the market space is relatively large. There is no need to enter the market without a total market of tens of billions or more. In addition, for these technologies, whether they can be replicated quickly is very important, because in order to achieve large-scale production, the technology must be able to be replicated quickly.
"McDonald's can be copied, but roast duck is not easy to copy, which directly leads to the gap between Quanjude and McDonald's." Song Zhiping explained.
Finally, it is whether this technology can be integrated with the capital market. Through financing in the capital market, CNBM can reduce the cost of capital invested in the early stage, which is very important for industries that heavily invest in assets.
These four questions seem ordinary, but in fact they condense Song Zhiping's deepest thinking on how to make technological innovation industries bigger and stronger.
From cement to new materials, from building materials to materials, this leapfrogging process means that the market capacity is doubled, and it also means that corporate profits are still able to grow new opportunities. In the field of non-metallic materials in China, there has always been a lack of a heavyweight "national player". Now, with the continuous penetration of China's building materials in this field, the pattern of the domestic new material industry will be completely rewritten.
Transformation and upgrading have always been the key content of corporate research, but for most companies, this is not simple, and even full of traps and crises.
Fortunately, CNBM’s experience in the market and Song Zhiping’s personal experience and profound understanding of technological innovation have made CNBM’s acceleration process more stable and smooth.
This article is transferred from China Cement Network
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