After the Spring Festival, the national Covid-19 is becoming serious which brings negative effect to Shandong glass processing factories.
Since March, there have been outbreaks in many places in Shandong Province. Each city have successively implemented relatively strict prevention and control measures to effectively control the Covid-19, but at the same time, the production and operation of the Shandong processing factories were also been affected.
Table of Contents
Covid-19 caused glass processing factories lack of orders to keep production
Covid-19 caused glass processing factories lack of orders t okeep production
Under the continuous influence of emergency response and Covid-19, in addition to stopped construction site operation &slow project progress caused by capital problems, glass processors has insufficient new orders,.
The low collection rate continues.
Glass processing factories in Shandong is encountering hard times and tight cash flow caused by COVID-19
At the end of last year, the payment collection of glass deep-processing enterprises was generally poor. In 2021, the delayed project progress also affected the on time payment to glass processors. Some enterprises had pressure on their financial cash flow, but the capital situation of most enterprises was OK.
The inventory of finished products is generally large.
Finished products cannot be delivered because of customer financial problems
The logistics transportation in many places is still limited,Finished product delivery in some areas are affected, the superposition project progress is slow, and the finished product inventory of most enterprises is large.
Finished products cannot be delivered because of customer financial problem
Highway is closed and logistic is blocked in China in Covid-19 times
Limited logistics, insufficient orders and high finished product inventory have led some enterprises to actively or passively slow the production schedule , and maintain personnel stability.
More details:
1.Order reserve: the reserve orders are scarce and few new project inquiry
Among the 35 enterprises surveyed, half processors has orders than support 10-15 days production; Less than 10 enterprises with a sales volume of more than one month; The order volume of the remaining 10 enterprises is about one week, and a few enterprises are less than one week. There are relatively sufficient orders for industrial glass, home decoration and foreign trade.
- Production: Production capability is not satisfied.
More than 40% of the enterprises surveyed are in rotation mode. Small and medium-sized enterprises can achieve single shift normal production due to small production capacity, and some enterprises use night shift for tempering production.
3.Inventory: the inventory of float glass is slightly insufficient, and the inventory of finished products is generally large.
The Covid-19 in many places caused locked down cities and factories.The logistics transportation is blocked, the freight costs increases, and the purchase channel is limited. Most enterprises mainly consume the early inventory, and the number of new purchases is small; Recently, the locked down in many places has been gradually released, and the logistics is gradually recovering. On the premise that the epidemic situation will not be repeated, normal operation will resume in May.
Most enterprises have a large inventory of finished products, which is mainly due to the epidemic situation and financial problems. The construction site is not in urgent need, resulting in the backlog of finished products in the processing plant; Some enterprises organize production according to the order delivery date to control the finished product inventory.
4.Funds and Accounts Receivable: Most companies are in good financial condition and have increased risk awareness
Most of the surveyed companies reported that their capital situation was good, and they were basically able to make cash on hand, and only had a certain amount of credit for some old customers. Through customer credit classification control, control of deposit, advance payment, contract performance, and try to control potential risks.
5.Insufficient orders lead to the phenomenon of grabbing orders at low prices.
At present, there is a shortage of orders. In order to maintain production, there have been some phenomena of grabbing orders at low prices. Although there are difficulties in phased operation, it is hoped that all enterprises will still ensure a reasonable profit space, maintain a reasonable price level, strengthen self-discipline and overcome difficulties.
In the past two years, the real estate has fully entered the stage of great changes in the pattern and reshuffle of the industry, and the large-scale demand for glass no longer exist. In addition, the industry itself, the extension and acceleration of the industrial chain of production enterprises, the prominent advantages of large and medium-sized processing enterprises and full competition lead to the picky choice of the demand side, superimposing the catalytic effect of the epidemic, and the reshuffle of the glass deep processing industry may be accelerated. Enterprises that do not have advantages in products, funds, sales channels, material costs, quality and other aspects have worse anti risk ability. In the environment of shrinking demand, intensifying competition and upgrading customers, the marginal effect of survival is getting smaller and smaller.
At present, the prosperity of the industry is low, and enterprises encounter difficulties in operation. Enterprises should do a good job in internal management, reasonably control costs, improve personnel skills through training and learning, and improve work efficiency, so as to prepare for full production after the start of the market; Based on long-term considerations, enterprises should clearly judge the future industry trend, clarify their own advantages and disadvantages, focus on survival and development, make reasonable medium and long-term planning, continuously enhance competitiveness and anti risk ability, and lay the foundation for the sustainable development of enterprises.
Under this hard times,many exporters and manufacturers has turnt to other new glass products,for example HaanGlas has started vacuum glass business,others are also developing home decoration projects to ultimate discovering the market requirement.
