Mr. Miao Yalei, General Manager of Xingyang Jinbo Abrasives Co., Ltd.
Refwin: Hi, Mr. Miao, thank you for accepting our interview. Please briefly introduce the current situation of Xingyang Jinbo Abrasives Co., Ltd.
Mr. Miao: Our Company produces white fused alumina, tabular alumina, fused mullite and fused alumina magnesia spinel, with a total annual capacity of 85,000 tons. We have state-certified chemical laboratory and physical laboratory that meets international standards; own 16 sets of automatic smelting furnaces, 4 Barmac production lines, 8 ball mill production lines, 12 sets of porcelain ball mill.
Refwin: The majority of China refractories manufacturers are faced with pressures of the rising costs of raw materials, freight charges and environmental protection, what do you think of this issue and what measures will you take?
Mr. Miao: Today, most of refractories manufacturers are facing the situation as you said. In the term of development growth, development pattern of China refractories industry is towards to industry transformation and upgrading period by eliminating backward capacity and promote industrial concentration. As for refractories producers, we should constantly reform technology and enhance sustainable R&D ability. Those enterprises equipped with sufficient technical strength and scale can grow into quality raw material suppliers.
Refwin: As we know, some international buyers begin to shift orders to other countries, like Southeast Asia, Russia with lower production costs, along with the rising production costs in China. How do you see the impacts on China refractories players? In your opinion, what new features will be presented in the future development of China refractories enterprises?
Mr. Miao: There is a wide gap between the overall development of China refractories industry and international advanced level of “Energy-saving and Green”. Most enterprises are facing a grim export situation. Because prices of China refractory raw materials such as white fused alumina have lost obvious advantages compared with other countries or regions in the world, caused by huge pressure of domestic environmental protection and increasing costs of raw materials and transportation.
The refractories market in developed countries now has already carried out adequate evolution and merger and reorganization after undergoing initial small scale, vicious competition and other stages. At present, more than a dozen giant refractories manufacturers including Magnesita, RHI, Saint-Gobain, Shinagawa, Vesuvius and Krosaki Hiroshima are controlling refractories market in most of the world outside China. The procurement of those groups belongs to global procurement, causing that we should deal with international competition. China refractories manufacturers should possess our own unique core competitiveness, such as R&D ability, core technology, resource advantages, etc.
In early stage, lots of refractory materials producers in China were set up relying on local resource advantages, such as bauxite in Shanxi and Henan, magnesite in Liaoning, graphite and clay in Shandong. However, because of weak consciousness of sustainable development, the non-renewable resources were excessively consumed causing that the glory days of those production bases is now not so bright.
Green, low carbon and energy-saving have become the aim of the development of China refractories industry under the situation of increasingly resource scarcity. The basic development direction of refractories industry should be independent innovation as the starting point, then gradually form “fine and intensive production” from “extensive production”, finally achieve the integrative development of consumption reduction and resource-saving.
Refwin: What are your opinions in the expansion of international market? What are your future plans?
Mr. Miao: Refractory raw materials enterprises both in abroad and at home are confronted with big pressure on sales. Low prices and disorder competition in refractories market result in uneven development of refractories enterprises. The enterprises who do not comply with industry norm and professional integrity put the whole industry in difficult satiation. In my view, we should integrate resources and constantly promote ourselves management level, improve product quality, thereby forming core competitiveness of China’s raw materials. In that way our products can compete directly with the similar products from the rest of the world, and gain the acceptance and recognition by international buyers.
Refwin: How do you see the challenges and opportunities of refractory raw materials enterprises that will be facing in 2017?
Mr. Miao: China’s refractories industry is facing the following situations:
Firstly, overcapacity leads to disordered competition; the pressure of quality reduction caused by continuous lower prices of refractory raw materials can not be changed in a short time;
Secondly, the lack of funds at the disposal of enterprises, doubtful payment for goods, rising effective interest rate of bank loan bring great pressures on financial costs and working capital;
Thirdly, the costs of environmental protection will be increasing day by day.
The manufacturers should seize the new opportunities for transformation and upgrading development. “New Normal” is not only pressure, but also challenges for refractories manufacturers. So that refractories enterprises should seize joint and reorganization policies and environment optimization opportunities seize the transformation from dimensions benefit model to innovation benefit model, seize the change of demand for product structure. Refractories industry should move faster to adjust structure, improve technological innovative ability and industrial concentration, strengthen the whole competitive power.
Refwin: Thanks for talking to us!