Opportunities and Challenges in Power Transmission and Distribution Manufacturing Industry

The development of the national economy and electricity has injected a powerful impetus for the development of the entire transmission, distribution and control equipment manufacturing industry. Currently, China's annual volume of power transmission and distribution equipment accounts for 32% of the world's total. From January to December 2012, sales revenue was 1,405.767 billion yuan, and total profit was 83.24241 billion yuan.

After ten years of rapid development, it can be seen that the power transmission and distribution and control equipment manufacturing industries still face many pressures and challenges in order to continue to maintain sustained, rapid and healthy development. First of all, China’s overall technological level is still relatively backward compared to the international market, mainly reflected in the technical design capabilities, functional optimization design capabilities, and system structural design capabilities of the overall system solution. In the market, there are many varieties of similar products. With high manufacturing costs, low concentration, and insignificant brand name effects, although product competitiveness has improved, it is still weak. As the focus of global attention, more international companies have entered the domestic market, the industry structure is facing new adjustments, and market competition will become fiercer.

Secondly, the power industry is a strategic industry with a priority for development in China. The State Council and the State Grid have successively promulgated a series of important policy documents such as the "12th Five-Year Plan for Energy Development" and "The 12th Five-Year Plan" of the State Grid Corporation of China, and created a favorable industry for the sound development of the power industry. Policy Environment.

If the country's macroeconomic policies and related industrial policies undergo major adjustments, it will have a certain impact on the company's production and operations. Finally, affected by the US subprime mortgage crisis, the global economy has slowed down significantly, and China’s economic development has also slowed due to the impact of the financial crisis. The financial crisis has led to limited investment growth in our country, significant decline in exports, and a drop in market demand. All industries have faced greater pressures for development. As the market demand for power transmission and distribution and control equipment manufacturing industries involves a wide range, the economic slowdown has also had a significant impact on the industry's development.

Despite facing many challenges, we can see that under the guidance of the government's new round of policies, the industry is also facing new historic development opportunities. In September 2010, the State Grid Corporation of China issued the “12th Five-Year Plan” Smart Grid Plan of the State Grid Corporation of China. It stated that during the “12th Five-Year Plan” period, the country will accelerate the construction of a modern power grid system, promote the construction of smart grids, and enhance the optimization of power grids. It is expected that by the end of the “Twelfth Five-Year Plan”, the reliability of urban distribution network power supply will reach 99.97%, the comprehensive voltage pass rate will reach 99.2%, and the line loss rate will further drop to 6.0%; The rate is lower than 6.2%, the power supply reliability rate is higher than 99.73%, and the comprehensive power supply voltage pass rate is higher than 98.45%. ”

At the same time, the investment in urban rail transit infrastructure construction also showed an upward trend. According to reports, there are currently more than 70 subway lines under construction throughout the country, with a total investment of more than 800 billion yuan. If you add approved projects, the investment will be more than 1.5 trillion yuan. In addition, there are 25 cities planning to develop urban rail transit. It is expected that by 2015, rail transit will require 75,000 sets of low voltage switchgear. In addition, the construction of large-scale projects such as the West-East Gas Pipeline, the South-to-North Water Transfer Project, and airports will also provide a large market space for the distribution switch control equipment industry. Although the development speed of China's real estate industry has slowed, it still maintains a certain growth rate, and it is believed that it will still create a small market space for transmission and distribution and control equipment manufacturing.

To sum up, in recent years, the demand for power grids and the demand for industrial enterprises in China have been declining but have increased, showing the industry characteristics of “a large amount of goods”. Therefore, in the long run, the demand for power transmission and distribution equipment in China will continue to Maintain steady growth.

To be sure, regional leading enterprises with strong R&D capabilities, capable of timely developing mature products that meet market needs, and successfully reducing manufacturing costs through scale effect, and having a strong sales network will have very good development prospects.