Notices like this rarely happen before this year.
"In the past few years, the company's operating conditions are good, the company is also adopting an extensive business approach, and the waste phenomenon is more serious. In recent years, with the overall market situation sluggish, the production cost is saved through refined enterprise management. It must be done." Mr. Zou, the chairman of the company explained.
To a certain extent, Mr. Zou’s words have revealed the development dilemma of the entire LED lighting accessories industry. According to the relevant data of the High-tech Research Institute LED Research Institute, there are more than 13,000 accessory-type enterprises in China, most of which are mainly small and medium-sized accessory enterprises, and the scale is generally small. Due to the relatively low technical threshold and the severe price reduction of downstream application manufacturers, accessory-type enterprises have generally fallen into the situation of no increase in profits.
Take Mr. Zou's company as an example. In 2014, the company's operating income was 120 million yuan, but the net profit was only 4 million yuan, less than 4%. For the entire LED accessories market, there are very few companies with a business scale of more than 100 million.
"I worked hard for a year, only to achieve 4 million. In the process, fortunately, I did not encounter the vicious reversal of the downstream suppliers. If I also encountered the phenomenon of running the order, then the 4 million is really a float." Mr. Zou is self-deprecating.
Survival dilemma is an inevitable problem for accessory companies. As the price of downstream applications drops, the price of the corresponding parts is also forced to decline.
For example, bulbs, lamps, ceiling lamps, panel lights and other indoor lighting products produced by Zhongshan LED application field, 3w bulbs have been quoted 2 yuan / only, T81.2 meters have been asked for 14 yuan / Article, 300*300 panel lights have been priced at 32 yuan / set, the product price has been converging with the traditional light source products, and even lower.
"LEDs are not easy in all walks of life. Downstream application companies have been compressing procurement costs in order to obtain price advantages. We have been directly affected as suppliers." Mr. Zou explained.
“In 2015, I will not go out to run business as I did in previous years. I mainly strengthen the internal management of the company. After all, the only thing we can do now is to reduce our production process and reduce unnecessary waste.†Mr. Zou said.
Mr. Zou’s words may also represent a future development trend of the accessories industry to a certain extent. For accessory-type companies that are in an extremely weak position in the supply chain, the strike of a single run may be fatal, and cost control through business management may be more important.
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