China's tool industry survived the financial crisis

The January 2009 issue of "Metal Cutting" cover article "Imagine 2009" organized industry experts and entrepreneurs to discuss the development of the Chinese cutting tool industry under the financial crisis. The same issue was issued by Shen Zongxing, secretary general of the Tool Branch of the China Machine Tool Industry Association. Under the Background of the International Financial Crisis, the Development Prospect and Struggle of China's Tool Industry.

The January 2010 issue of "Metal Cutting" re-released the Secretary-General's signature article entitled "Challenges and Opportunities for the Tool Industry in the New Situation."

The "financial crisis" is a topic that has to be mentioned in the "Eleventh Five-Year" period. It is also the most memorable battle in the five years and a protracted war. Fortunately, from the perspective of the entire industry, we survived this crisis and survived the crisis with a qualified record.

From the fourth quarter of 2008, many business orders fell by 50%. From October to November of 2008, the large-scale mainstream tool companies influential in the country suddenly experienced a sharp decline in sales, which generally fell by 40% to 50%. Sales in January 2009 improved slightly, down 36.7% year-on-year. The situation in February and March continued to pick up. Some companies' orders and sales have reached 70% to 80% of the same period of previous years. However, the sales revenue in the second quarter decreased by 33.2% year-on-year, and the profit dropped by 72.7%. Until August, signs of improvement appeared.

There are external crises, and there are lingering evils, and companies are caught in unprecedented difficulties. The domestic tool industry fell by around 15% year-on-year in 2009. Due to the continuous deterioration of the international market, the international market has generally declined by as much as 45%. The international giants are not immune either.

Lennart Lindgren, executive vice president of Global Markets and Business at Sandvik Coromant, said in an interview with reporters in October 2009 that from the global market of Sandvik Coromant, “The markets that were affected earlier in the year were the Japanese and American markets. With the gradual development of economic conditions, the impact on the European market has become more pronounced. Asia, especially the Chinese market, is the least affected, and there are signs of obvious recovery.”

Shen Zongxing, secretary general of the China Machine Tool Industry Association’s tool branch, pointed out that “the response and performance of the large number of companies in the tool industry in the face of the major impact of the global financial crisis has shown that after more than a decade of market-oriented reforms, , the progress and development made by the enterprise as the main body of the market."

Ten years ago in the Asian financial crisis, many companies ran into difficulties because of market changes, hard support for production scales, and even ignoring the need to cut prices for marketing. In the face of this global financial crisis, most companies have actively confronted the reality of market changes, adjusted production rhythms in a timely manner, and have done a lot of solid and effective work in reducing costs, increasing revenues, reducing expenditures, and improving market resilience. Moreover, many companies have also learned to “recover” “recruiting” “machines”, such as taking advantage of market downturns to focus on internal training and process transformation, seize the opportunity to carry out structural adjustments and industrial upgrading, and gain an opportunity for a new round of growth.

We have seen that after this crisis, companies are more clearly aware of the need to shift from the development of traditional standard cutting tools to the development of modern and efficient cutting tools, and the shift from providing products to providing services. At the time of the crisis, large international corporations fully promoted their own “overall solution” services to users, helping them to reduce costs and increase efficiency.

In general, the financial crisis also gave us an opportunity for adjustment. Many companies took the opportunity to rectify internal management, promote resource conservation, and accelerate the pace of development. The financial crisis test proved that our company has been hone in the market for many years. Has been able to participate in market competition as a truly independent market entity.