Zhuji Diankou Town: Plumbing Hardware Industry Transformation and Upgrade

In the 105.7 square kilometers of Diankou Town, Zhuji City, Zhejiang, there are 4,018 large and small enterprises.

From the first small hardware factory that was established 40 years ago to today, the industrial capacity of Diankou Town continues to expand, forming four major industrial clusters including copper processing, pipe industry, auto parts and refrigeration. Today, the factory here assembles parts for tens of thousands of cars every day, and the pipes made every week can circulate around the Earth’s equator and sell 4 billion yuan to the world every month...

Although there are many companies and large production capacity here, more than 90% are small and medium-sized enterprises with low added value and strong dependence on external funds. In the current complex economic environment, the development of small and medium-sized enterprises in Diankou Town has a certain sample significance.

The reporter recently visited several industrial enterprises in Diankou Town, including listed companies with tens of billions in output value and small enterprises with sales amounting to one million yuan. There are both enterprise groups that have established a modern enterprise management system and father and sons. Traditional family business. Some are involved in the field of new energy and new materials, and some stick to traditional industries. We have sought to understand through investigations and understanding how the vast majority of SMEs have been puzzled, thought and acted in the process of accelerating the transformation of economic development methods and accelerating industrial restructuring and upgrading.

Whether the "comfortable frog" should jump out of the warm water. "The water temperature is constantly rising. Although it is less than 60 degrees Celsius, it must be time to jump out." Yao Xianjun, general manager of Hairun Precision Machinery Co., Ltd. admitted to reporters that labor costs Year after year, capital costs have doubled, raw material prices have fluctuated, and product profitability has dropped to no more. All these make him feel like a frog in the warm water. They can clearly feel that the “water temperature” is rising.

Similar to Yao Xianjun's, almost every business owner in Diankou Town who was interviewed thought that the “water temperature” was increasing.

For many small and medium-sized enterprises in Diankou Town, it is the first time that such a strong sense of crisis has occurred. The "comfortable frog" once enjoyed the moisture brought by "warm water".

Relying on the strong local manufacturing base, many small and medium-sized enterprises in Diankou Township have been able to “get rich in the four seasons” with “a piece of land, two machines, three to five workers”. Even when the international financial crisis spread, due to the 4 trillion yuan investment plan of the country and the preferential policies of “cars going to the countryside” and “home appliances to the countryside,” many small and medium-sized enterprises are engaged in the production of automotive parts, pipe fittings, and wire and cable. The enterprise also did not feel too severe impact.

But this time the "water temperature" is indeed different.

The difficulty of financing is the number one problem. Yao Xiandu said that the actual interest rate for SMEs in Diankou Town has reached 15% per annum, and the private lending rate is as high as 30%. It is still difficult to meet demand.

Wang Jilong, general manager of Jilong Ruiyuan Machinery Co., Ltd. feels that the increase in labor prices is another firewood fire. Two years ago, the monthly salary of a brass casting worker was around 1,600 yuan, which has risen to more than 2,500 yuan this year. If you can't provide a good working environment, workers may soon switch jobs.

Li Jingfeng, chairman of Yongjing Technology Co., Ltd., feels that the pressure of market competition is getting bigger and bigger. Products must be continuously upgraded and upgraded to increase technological content. This requires companies to increase R&D investment and attract technical talents. Otherwise, products will not be profitable, and more losses will be produced.

In addition, the decline in the overall prosperity of the automotive and real estate industries has also led to the loss of downstream market support for a large number of auto parts, pipe fittings, wire and cable manufacturing.

With so many factors superimposed, the pressure on SMEs in Diankou Town is doubled, especially for those small enterprises without brands, technologies, management, and channels.

Everyone believes that a cruel market reshuffle is inevitable. The "water temperature" is already approaching 60 degrees Celsius, and it is timely to "jump out" to speed up the transformation and upgrading. "jump" or "not jump" is related to the survival of enterprises.

Whether the “fund prescription” can solve all difficult financing problems is considered to be the biggest bottleneck in the current development of SMEs. During the investigation of Diankou Town, there was news that SMEs had to leave because of the capital chain break.

In response, many small and medium-sized enterprises in Diankou Township stated that the difficulty of financing has brought about a greater impact on their own business development. Li Jingfeng thinks that this impact is mainly manifested in three aspects: First, the normal fund demand can not be fully satisfied; Second, the cost of capital has been higher than the profit; Third, at a critical moment, some banks have stepped up their debt-raising debts, which is tantamount to "a drudge". .

However, he also believes that financing difficulties is not the most fundamental factor affecting the development of SMEs. "If we do business in a down-to-earth manner, the general capital chain will not be easily broken. Most of the companies that have problems today are blindly expanding in the early stages or investing funds in real estate, minerals, and private lending, and expect to obtain profits in the short term."

Dian Zhuangxi, the party secretary of Diankou Township, agreed with this view. According to observations of the development situation of SMEs over the years, he believes that the shortage of funds is only the ultimate performance of enterprises in trouble. If companies rely excessively on external cheap funds, once the situation of macro-finance tightens, it will inevitably face difficulties again. To truly embark on the path of healthy development, it is necessary to prescribe the right medicine.

Yang Junjie, general manager of Mass Energy Management Co., Ltd., frankly stated in the face of reporters' questions: “The most difficult part in corporate transformation and upgrading is not the lack of money, lack of compound talents, lack of core technologies, and lack of marketing models.”

Facts have proved that some small and medium-sized enterprises that focus on increasing research and development, strengthening internal management, and striving to open up the market are worth noting even in adversity.

For 11 years, Quanxing Seiko has achieved a leading position in the domestic automobile steering system industry. From the initial production of the steering pump, steering gear, and later to the steering system, to the current development of the new generation of EPS electronic steering system, this company has no problems operating in the automotive steering system R&D and production, and has occupied 30%-40% of the domestic market share. .

Huajia Holdings, which started as a small workshop to produce hardware and copper parts 25 years ago, started to produce automotive parts for the first time 13 years ago and entered the PE pipe industry six years ago. Now it is accelerating the expansion of the boiler industry. Every adjustment of the product structure of an enterprise is an extension of the industrial chain and opens up a broader market.

Shield Group, one of the three “star enterprises” in Diankou Town, can increase sales revenue by 30 times in 10 years. The recognized “secret” lies in the decisive implementation of shareholding system transformation. Today, a large number of latecomers, such as Mingshi Group and Hairun Precision, are also trying to implement a share reform, introducing a modern enterprise system, not only to get rid of the original family management model, but also to introduce a group of “capable people” to complete the “people”. "Manager" to "system administrator" change.

In addition, efforts are made to open up new international markets, keep a close eye on the country’s industrial policies, and recruit all kinds of elite talents to form a large-scale advantage. These successful corporate stories are a series of “prescriptions” opened by shopkeepers in practice. .

The tiny wormwood can also flutter away. In an investigation and interview, the reporter felt that the cultural genes inherent in the enterprises in Diankou Town, such as keen market awareness, tenacious grassroots spirit, and innovative pursuit of constantly surpassing themselves, used to be The resource-poor mountain towns have created a huge industrial cluster. Today, they are still supporting many companies to solve their problems and tide over difficulties.

Zhejiang Aimei Sakura Holding Group is a home-grown enterprise in Diankou Town, and its development track is very representative. This company that has been established for less than 20 years has started to produce valve parts. Later, it gradually expanded along the industrial chain. Currently, the valve products that are produced have almost entered all types of water and electrical equipment manufacturing, and they have become “AO Smith” and “Siemens”. "Haier" and other major brands of major suppliers.

Asked about the origins of the name “Ammer Sakura”, Chairman Chen Xuefeng explained that he hopes that his company’s products are like sageweed. Although it is commonplace and unknown, it can give off a long-lasting fragrance and refreshing.

The moral of this name fits well with the characteristics of most Diankou Township enterprises: low-profile, pragmatic, unassuming, and pursuing sound and sustainable development, often growing up in the industry from others inadvertently. Over the years, the economic development of Diankou Town has experienced numerous twists and turns, which not only did not erode the industry’s foundation, but also enabled local enterprises to develop stronger resistance to pressure and strain.

In the face of temptation, “stabilize” and “stand up” in the face of a crisis. When the machine arrives, it “holds it.” Zhao Fusheng, Party Committee Vice Chairman of the Dongan Holding Group Co., Ltd., sums up the behavior of the enterprises in Diankou Town. .

During the discussion with some SME representatives in Diankou Town, many of the opinions heard were encouraging. Some say that companies are the mainstay of the market economy. It is up to them to think of ways to escape from the predicament. There is no reason to “lay down” and wait for others to help; some say that changing strains are the skills of companies and who are more than the companies themselves. Concerned about the transformation and upgrading? Some said that companies should not be afraid of competition, and offense is the best defense. We ourselves are constantly moving to new heights in adjustment and adaptation.

Faced with the current market situation is complex, high operating costs and other business difficulties, most of the companies here still choose to stick to their main business, just to adjust the pace of progress. As Yao Xianjun, general manager of Hairun Precision Machinery Co., Ltd. said, “There is a lot of money to do, and less money to do things. If you don’t get **, you can slow down the pace of development and you must not be disorganized.”

Stabilized, lived up, once the machine came, the market feels sharp sense of the town of Diankou enterprises can often "catch." Shortly after the release of the national strategic emerging industry development plan, nuclear grade flooded screw chillers, new energy enameled wire, wind turbine assembly, wood-plastic composite materials, seawater desalination and security filter equipment, etc., have appeared in the products of Diankou Township enterprises. In the directory, along with the accelerating pace of infrastructure, Diankou Town has produced a number of PE pipe production lines for the municipal pipe network; opinions on promoting the development of energy-saving service industries have just been introduced, and several companies such as Hailiang Group have entered the contract with the latest technology. The new field of energy management...

Being good at change, being brave to innovate, being not easy to be defeated, and capturing every opportunity for fleeting market opportunities, these qualities make Diankou Town’s enterprises “steadfast”, “stand up” and “catch up”. Doesn’t it contain the answer to the transformation and upgrading of SMEs nationwide?

The "visible hand" must make a difference. What can the government do in the transformation and upgrading of regional economies and SME groups? What to do? It is the problem that the Diankou Town Party Committee and the government have been exploring.

Like many other block-like economically developed areas, in the process of formation and development of industrial clusters, Diankou Town has taken various measures to support the development of the market and assist enterprises in solving practical problems such as capital and technology. .

Starting from the Canton Fair in the autumn of 2009, the Diankou Town Government organized a group of companies to participate in the exhibition for four consecutive sessions. Diankou Town Hardware, Auto Parts, and Building Materials Specialized Pavilion were established at the Expo Pavilion, which is located across the street from the main exhibition hall. "Large hotel next to the porridge stand" not only brought orders to hundreds of companies participating in the show, but also the "Diankou Hardware" and "Diankou Management" regional brands that Dingkou Town strived to create.

In order to alleviate the problem of financing difficulties for SMEs, the Diankou Town Government has used the “Golden Signboard” of the first financial security community in East China as a bridge to carry out various types of bank-enterprise cooperation and promoted the growth of good SMEs to the bank in order to obtain credit limits. At the same time, the “credit storefront” project with the construction of credit companies as its main content is implemented, and a system of guarantee for small and medium-sized enterprises is established. By the end of last year, 8 financial institutions in towns had issued ** balances of RMB 7 billion, and unfavorable totals of less than RMB 6 million.

The shortage of talent and human resources is a problem that almost all companies will encounter at different stages. The Diankou town government has made the most efforts in this regard. Of the more than 120,000 people in Diankou Town, more than 60,000 are called “Xindiankou” migrants, and about 30% of them have been living in Diankou Town for over 8 years. In order to transform this part of migrant workers into industrial workers, Diankou Town invested financial funds to build a system that targets Xindiankoukou. In terms of medical care, housing, hygiene, culture, and children’s education, Xinkoukoukou used “ The same city treatment "even "super city treatment." Even in the most severe moment of the international financial crisis, there was no large-scale “labor shortage” in Diankou Town.

In view of the tight supply of various factors of production in the recent period, the Diankou Town Government pays more attention to the role of tangible hands and guides the effective allocation of limited resources to the places where the greatest economic and social benefits can be generated. In the words of Zhang Zhuangxiong, it is necessary to do a good job of “stocking and incrementing” articles to guide and force companies to achieve transformation and upgrading.

In the project land, in addition to the investment intensity, the tax revenue per mu, and the time limit for the start of construction, Diankou Town has also set up a “hard bar” for workers’ compensation. The local wage level is usually around 30,000 yuan a year. "Below this level will no longer be allocated to project land.

“The stock with poor quality is flushed out, and good quality increments must come out.” With the increase of local land, environmental protection thresholds, and the increase in the cost of labor and other factors, the town of Diankou has begun to show signs of outward shifts in production. However, most of the industries that have gone out are low-end industries, while high-end industries such as copper pipes, wall-hung boilers and sanitary ware are left in the local market.

According to statistics, from January to August this year, the industrial electricity consumption in Diankou Town grew by only 1% year-on-year, but the tax revenue increased by 42%, the fixed asset investment increased by 26.3%, and the profit increased by 15%. "The same amount of resource consumption, but the efficiency of return has increased."

At present, Diankou Town is making every effort to build the new northern cities. From "town" to "city", the shop will build a platform for gathering of elements at a higher level and in a larger area.