Or rare earth industry consolidation combined vertical and horizontal
- Details
- Category: Rare Earth News
- Published on Tuesday, 24 September 2013 17:23
Ministry of Public Security, Ministry of Land Resources , Ministry of Environmental Protection , Customs, State Administration of Taxation , the State Administration for Industry and Commerce , the State Administration of Production Safety Supervision and Management August 5 jointly issued a notice , according to the "State Council on the promotion of rare earth industry continues healthy development of a number of opinions " " Local governments in the region overall responsibility for management of the rare earth industry "requirement , the inter-ministerial coordination mechanism for member units of rare metals , since August 15, 2013 - November 15 in the fight against rare earth mining, production , the circulation of illegal special action . Some analysts believe that the purpose of this activity is to combat " black chain " to rectify the field of mining and refining production and circulation order, clearing the way for promoting industry consolidation . January 22, 2013 , the State 12 ministries issued "on accelerating the focus of industry mergers and acquisitions guidance" , nine major industry mergers and acquisitions on the agenda , the rare earth industry was included in the list . However, as time goes by , the rare earth industry, mergers and acquisitions , but not as people would like . To this end, including the introduction of industry management department to carry out special activities including a variety of measures , hoping to force policy management , and promote the integration progress .
Difficult situation to promote the integration result is not satisfactory
Rare earth industry has never been so fragile and sensitive . In early July, just the news that the relevant state ministries will carry out special activities to combat the " black chain ," a market that is affected by the policy rebound . So there will be media speculated that the rare earth industry mergers and acquisitions to speed .
In fact , from 2011 to 2013 began the second half of the first half of the rare earth industry downturn . According to "China Metallurgical News" reporter learned of the situation from the Baotou Rare Earth , the first half of 2013 , due to market cold, Baotou Steel Rare Earth production tasks mainly from the backlog . The lack of policy support domestic rare earth enterprises in most production or semi- shutdown state. Industry downturn , the community once again to boost hopes in the industry consolidation . January 22, 2013 , the State 12 ministries issued " on accelerating key industry mergers and acquisitions guidance" , the rare earth industry consolidation task again reiterated .
In fact, the country has been the industry consolidation as the starting point to promote the development of rare earth industry . If you build from the 1993 Inner Mongolia Rare Earth Group , counting 20 years, the country 's rare earth industry consolidation effort has not stopped . By the end of 2012 , and Inner Mongolia Baotou Steel Rare Earth 9 rare earth smelting separation integrate strategic framework agreement signed by enterprises , the integration of rare earth in northern hastily ended. Southern Rare Earth integration is also not optimistic. Despite the strong involvement of the central enterprises , also produced the dominant form of business , but from the control of resources and market impact, relive the situation has not been a material change . Obviously, such a result from the ultimate goal --- the formation of large enterprise groups is still some distance earth .
This integration did not able to "save" China Rare Earth Industry . Although the industry associations and the Ministry has repeatedly said that in 2012 made significant progress in industry consolidation , but the market performance of the different. By the end of 2012 rare earth prices and highest in July 2011 compared to 68% of lanthanum oxide fell , down 72% praseodymium neodymium , europium oxide fell 79.8% . China's rare earth element cerium lanthanum stock up , its oxides or even 20,000 yuan per tonne to 3 million . Jointly by the prices of rare earth enterprises operating results to decline. According to industry for 18 rare earth enterprises focus on statistics, in 2012 compared with 2011 , sales revenues and profits were down 39.91 percent and 43.32 percent .
Promote industrial integration difficulties , the integration of the result is not satisfactory. So, was pinned exactly how rare earth industry consolidation ?
How much joy horizontal joint problems misery
There is no doubt that 20 years advocated the integration of China's rare earth industry is a horizontal integration . In the past a very long period of time , the rare earth industry has been the lack of clearly defined , until it reached a consensus in the industry in recent years : the rare earth industry that involves the rare earth materials , materials production enterprises. 20 years of integration , it is also in the rare earth mining, smelting and separation of rare earth materials production and between enterprises . 2011 introduction of the " State Council on promoting the sustained and healthy development of rare earth industry, a number of opinions " on the clear requirements, we should vigorously promote the integration of resources , significantly reducing separation of rare earth mining and smelting number of enterprises, improve industrial concentration , the basic formation of large-scale enterprises as the leading industry pattern .
From all indications, the industry 's horizontal integration at different times were met with resistance , the rare earth industry restructuring mergers and time and time again abortion. Among them, the biggest obstacle is the different interests unit "system blocking ." In "rare earth kingdom" in Jiangxi Province as an example, mining permits in the form of rare earth resources , focus rests in the hands of mining companies in Jiangxi Province . Demands due to their own interests , local government categorically refused to hand over control of resources . Even Minmetals central enterprises involved in this so-called integrated smelting separation only incorporated businesses, can not involve mineral sources. Lack of resources security of supply , so that Minmetals Rare Earth business segment full of variables. Rare Northern relatively good situation . Since resources are concentrated in the Bayan Obo mine, a move Baotou Steel Rare Earth "hungry " killer , let smelting separation region Enterprises attributed command. But , even so, the Baotou Rare Earth also has its own hiding something : the original smelting separation ability of companies to get beyond the mandatory production plans , integration of new capacity coming on how to digest ? Diluted production plan means more idle assets and waste, are reluctant to any business .
Difficult to promote , so far China's rare earth wars combined smoke is not casual , but do not know when settled . In the south, in addition to Minmetals , Rising , the Big Three JCC wrestling competition, many small enterprises are still isolated muddy the waters, waiting in the wings . Although the North identified the integration of rare earth year to complete the goal , but three years later, Baotou Steel Rare Earth before signing a piece of paper . This paper agreement does not protect it from emerging in the illicit production interference.
In the March 2013 meeting of the China Rare Earth Industry Association member -cum- director of the first session of Congress, China Rare Earth Industry Association, Gan Yong , admits: "Participation integrated enterprise group 's proposal , many remain in the conceptual level, with the integration of enterprise in the assets, business , personnel, planning , were not into effect . "
Origin of successive invisible industry demands
It has been worried about the immediate interests of horizontal integration would create a monopoly . Prophecies come true. Today, this monopoly profits benefit the industrial chain transfer brings difficulties to the development of the industry is bringing a series of trouble.
August 2013 at the Fifth Forum Baotou Rare Earth on the upstream and downstream enterprises become raw material for major , "complained would ." Manufacturers complain that the application of rare earth materials , volatile , which means that only reduce or stop using rare earth materials . The negative effects of raw material prices are also transmitted to the intra-industry . Chengdu Galaxy Magnets Co., Ltd. Chairman Wu Zhijian that raw material prices in 2011 was " Banded ." Breaking the rare earth raw materials price volatility demand balance and stimulate the application of relevant alternatives , resulting in shrinking market . At present, a serious shortage of NdFeB enterprises operating rate .
Rare "door " to strengthen the integration of raw materials within the degree of concentration of the market 's pricing to be exclusive . This makes the "door" foreign enterprises extremely insecure. Although rare earth prices from the second half of 2011 began to fall, but downstream business has been reluctant to take over. One of the reasons , in addition to price , the more is the fear once again subjected to earth " disuse " frustrating .
If you conduct a review on the integration of the calendar year , not difficult to find , horizontal integration solves the problem of centralized management of raw materials , production and market supply of raw materials while filling the application match intensify the conflict . Distribution rights are raw materials enterprises to master , in the interests split is inevitable, " the rich on the poor under the " downstream applications enterprise only passively endure . Over time, even if the upstream integration into large groups, but the lack of application to absorb , digest , diversion, it will be like a lake as unsustainable . Back in 2011 , when declining market just outcrop , an old industry experts predict that the market downturn could last for 10 years. His argument is that the current round of downward due not only to supply and demand imbalance . As the raw material costs and the upstream downstream squeeze profits , and dampen the enthusiasm of end-user applications . This is like a drastic measure , the industry sustains serious injury basis . Thus , the industry recovery no longer depends only on the industry , the need for external conditions with naturally be more ado. While the old experts say too pessimistic , but it speaks of an invisible behind industry adjustment requirements: integration not only to solve the concentration and the problem of excess capacity , but also to solve the problem of the industrial structure . To put it bluntly , is to solve the matching problem downstream industries .
In fact, the coordinated development of upstream and downstream countries has been one of the principles of rare earth development strategies . In the early stages of development , the state is committed to the development of rare earth resources , but also to promote the application as an important task given attention . In the country , supported by the application of rare earth in steel , rare earth agricultural leadership team, rare energy-saving lamps and other organizations established collaborative network applications , the relevant departments organized for many years and even spent a lot of rare earth application and popularization exhibitions. Applied research also never absent in the rare earth research . However, with the restructuring of enterprise reform , it all fell apart . Obtain the right to operate the business and then refused to take the effort beyond the production of raw materials . A business leader to "China Metallurgical News" reporter made such analysis: " Numerous areas of application of rare earth for smelting and separation enterprises, equal access to these areas into the manufacturing process from raw materials . Involved in cross-border interbank unfamiliar areas , business runs a huge risk . "
Externally and internally , the application of traditional Chinese Rare Earth began to shrink . According to 2012 statistics of the National Office of rare earths , the number of traditional areas of application of rare earth only a few thousand tons. Once the national flower of the application of rare earth steel almost stagnant . In traditional applications exit, the application of rare earth new materials become the new darling , but the 2011 changes in the market has hit material production enthusiasm. 2012 Rare Earth Magnets domestic production fell by 11.9% , rare earth luminescent materials production fell by 43.9% .
Today , smelting overcapacity, shrinking the negative effects of the application of radiation to the consumer market began . Expensive raw materials , downstream applications willingness plummeted, smelting and separation products abnormally " oversupply ." 2012 China plans to produce 90,400 tons of rare earth smelting separation production , the actual completed only 82,000 tons . The first half of this year , rare earth prices fell by more than 60% , but trading was light . Raw material production in the long dark submerged AIDS , terminal applications truss contraction, the market's " stagflation " inevitable. If we say , repeated before the ebb and flow of the market supply and demand imbalance , " overreaction " , then today's confusion is entirely industrial chain of "forced correction ."
Insiders clearly see the lack of application of rare earth hazards . Jiangxi Rare Earth Society Meng Qingjiang in China Rare Earth Industry Association, the Third Session of the Standing Council outcry , "Strengthening the rapid popularization and application of rare earth industry is the driving force for sustainable development and the end ." This year in August , Deputy Secretary-General Zhang Anwen Rare Earth Society also Baotou Rare Earth Forum said: "cracked earth dilemma , on the one hand you want to pay close attention to the source , control the volume ; hand to vigorously promote the application of expanding demand ." China Rare Earth Industry Association Secretary-General Ma Rongzhang that industry associations next main tasks is to strengthen market cultivation , build cars, wind power , and white goods area of rare earth application platform.
However, the fracture of the industrial chain is not alone appeals and services convergence . So, who is going to promote downstream butt ? Who is to balance the interests of upstream and downstream magical hands ?
Path industrial extension spontaneous attempt
In recent years , the international economic recovery is slow, reducing demand for rare earths . By this time, has been discontinued foreign rare earths are to resume production. Such a situation, intensify efforts to become China's rare earth application to maintain a prerequisite for sustainable development .
Rare areas of local government is trying to turn raw materials and application of executive power of the industrial chain . One approach is to build a rare earth industrial park. According Rare Association statistics, there have been built or are under construction in rare earth industrial park has 18 as much. The Government's aim is clear , first, the use of investment resources , the formation of clusters of rare earth industry , promote local economic development ; second is that the application use policies relief , repair industrial chain, foster new industries . Unfortunately , the government 's efforts seem little in return . Ma Rongzhang disclosure , the current domestic rare earth park construction in disorder . Joint venture and a handful of end-use applications , mostly for processing of raw materials , these enterprises have the goal of building located in the largest production of rare earth materials , the strongest , exacerbated by excess production capacity of raw materials .
In the hands of administrative frustration occasion , the industry giant has taken tentative steps Baotou Steel Rare Earth . 2010 Rare-Earth and Hebei ENN to jointly set up a rare treasure Bo Baotou Medical Systems, Inc. , and its products as magnetic resonance imaging equipment (MRI). Since its establishment, the company's growing concern. Whether soaring prices of rare-earth or rare earth industry downturn, the company 's production capacity , output increased year after year . In addition to performance , the rare treasure Bo on the Baotou Rare Earth 's greatest contribution is to become the upstream raw material receiving end . It is understood that China's potential MRI market , the annual domestic digestible 1/ 4 of the rare-earth magnetic materials production. Undoubtedly, the presence of rare treasure Bo to gain a competitive advantage Baotou Steel Rare eating a reassurance.
Throughout the industry , on the one hand , smelting separation of enterprises involved in application development through vertical integration there has been inert , raw materials to produce enormous profits so that these enterprises lack the initiative to open up new areas ; the other hand, they are also unwilling to bear the cross operating risks. Over the years, numerous and dispersed downstream applications from small-scale manufacturing enterprises lay over . However, with the application of rare earth high-end, regardless of technology or funding , the downstream business has been stretched , the digestion of raw materials is increasingly weak . By this time, the development of stronger and bigger vision and the reality of the limited market capacity , the industry began to change occupy the dominant position smelting enterprises mind.
The reason to break the routine intervention terminals, Baotou Steel Rare Earth There is another plan . 2010 Rare-Earth developed a "second five " to achieve 10 billion yuan output value targets. Currently, the global demand for rare earths is about 20 million tons. Domestic rare earth enterprises in the completion of integration , at least to keep 4 to 5 , the average annual output equivalent to each company of rare earth oxides only 40,000 ~ 50,000 tons . If only the production of raw materials , so that production can not hold up 10 billion yuan output value . Baotou Steel Rare Earth only to double the value of the application of the terminal to find a way out.
Baotou Steel Rare find is different from the past " similar merger " of a consolidation path: resources as the core, extend the industrial chain , enhance the value of resources . In fact, this vertical integration in the overseas rare earth enterprises abroad has become a strategy to counter China's rare earth . It is understood that a resumption of production of rare earth companies are the industry chain from the production of minerals and compounds , extends up to the production of energy and materials . Byron Capital Markets research team an analyst pointed out : "In the past emphasis on Western companies ' level of division of labor ' , the company than any other company that does well only thing, the scale of production and low-cost access to profits ." "But , in the future longitudinal integration --- complete supply and processing chain integration --- become more meaningful . " in this sense is that , through vertical integration, a reasonable allocation of costs and profits, to keep the whole industry chain of production and profitability .
However, attempts Baotou Steel Rare Earth industry as a whole seems to be a special case . One can imagine , if not greater benefits, smelting separation giants reluctantly immersed in competition for resources and the refining capacity in the contest , the most long-term plan is to expand the scale of production of rare earth materials . View Baotou Steel Rare Earth in the future will find five major industrial chain line , only two lines behind the applications --- magnetic resonance imaging equipment, and nickel-hydrogen batteries , while other areas are still empty .
Leveraging the combined vertical integration would become the fulcrum of it ?
2013 Spring Festival is over , Baotou Rare Earth Research Institute of Sun Xiaohua had constantly run to Baotou Steel seamless steel pipe plant . His hands have a technical project , its research and development of amorphous rare earth magnetic flux leakage probe boots for seamless online testing, not only can import substitution, and low prices . But because of funding , marketing, processing and other reasons , the project has not been able to form productive. Sun Xiaohua hoping to help end users , bringing technology into products . In Rare Earth Research Institute , a project like this there are high temperature resistance of rare earth lanthanum chromite .
" Departure " is not for technical reasons
Over the years , the industry accustomed to the application of weakness attributed to technical factors . From an objective point of view, although foreign patents covering the domestic application of rare earth difficult , but it is not a mineral to be found. China 70% to 80 % of the rare earth materials needed to complete transformation of the domestic downstream enterprises have the opportunity to bypass the patent application , directly to digest raw materials. Huge domestic equipment manufacturing needs, but also for the application of new technologies to provide a space to display . Like the earth , like the amorphous magnetic flux leakage probe boots , some market demand for small but practical application projects in the country are common. China Rare Earth application long slump, the biggest reason is not the technical ability, but rather the industry convergence. Rare saving lamp that is a typical example. In China, energy-saving lamp technology can be described as rare mature , national and even introduced subsidies to promote energy-saving lamps earth . However, the lighting manufacturers for fear of high prices and unstable supply of rare earth , rare earth and willing to produce light . In the current round of market volatility slippery , more than 80 % of the rare earths energy-saving lamp enterprises closed down, a career change. This situation is people feel helpless, absolutely no in between two sectors a reasonable distribution of profits. Uncontrolled raw materials companies raking in profits , thus pushing up the prices of end products . When consumers do not accept this cost is applied directly to the face of market enterprises only leave.
Integration may be of interest to solve the problem. Like the Baotou Rare Earth has quietly done, the raw material production and application development vertically integrated to form a complete industrial chain. Thus, the chain transfer mechanism spontaneously generate profits , coordination of upstream and downstream production, which broke through upstream " stagflation " downstream " imbalances" ills .
Vertical integration or breaking
Sun Xiaohua vertical integration technology can also provide solutions into problems .
Undoubtedly, technology patents heavy blockade , regardless of application technology research and development of new products or technology to transformation, new product market cultivation , needs huge investment . This input is not research funding and national subsidies can give . Meanwhile, the earth is increasingly being used in high-tech fields , and doomed product concise. At this point, a product of a traditional production line is no longer economical. To build the development, production , marketing a common platform , supporting applications profitability through product collection has become a reasonable production path . The ability to meet these conditions, objects , control of rare earth resources , obtained from the resource wealth , in turn benefit from the application of marketing materials business is the chosen one.
Perhaps, vertical integration can solve the most difficult problems is the problem of horizontal integration . Horizontal integration forward in time , local governments do not want to put their own interests because of mineral rights to the integration of enterprise and become resistance. The reason to do so , the Government hopes to attract industry resource that Kewutongshu Golden Phoenix , bringing not only capital , but also the formation of follow-up industry , in a wider range of employment and local economic development to solve the problem . Exactly vertical integration provides a starting point to solve this problem . Vertical integration , the dominant firm on the basis of resource development is bound to extend the industrial chain, so that more applications processing enterprises settled in place , local governments so far fewer concerns.
Active dividend policy
In horizontal integration difficulties when vertical integration may be regarded as a breaking of the policy. However, the vertical integration although signs burst on the scene , but does not represent a conscious choice to become the industry . On the contrary, in reality, vertical integration has suffered severely criticized . Baotou Steel Rare Earth in profit for the year 2012 constitution, the application of the lower end of the industrial chain business profit contribution to the Group is very small, and some are even negative. This annual report sparked discontent , have questioned the practice of industrial extension . Complained about the short-sighted investor is meaningless , you should consider is how to compensate for application investments . The same as state support horizontal integration , vertical integration is also needed support from the policy level . In fact, the policy of state support for application of rare earth , not lack of funds , but more to point the way subsidies to the project. This allows vertical integration, to assume the leading enterprise application upfront investment can not share relief . From another perspective , this also exists to support decentralized infrastructure duplication, piecemeal funding application is not conducive to research topics of significant drawbacks . Therefore, the development of appropriate ancillary support policies, is crucial for promoting vertical integration . Formulate supporting policies may not be required to make sacrifices too , can change the idea : to establish a single injection port , the dividend policy by integrating enterprise distribution , to ensure the whole industry with comprehensive "nutrition ." Perhaps only when the dividend policy rather than face the whole industry chain of a specific project, the integration of enterprises to participate in the initiative was only able to mobilize .
It is also a policy level vertical integration . This integration not only upstream business needs, downstream firms also need . Rare treasure Bo says that even though a lot of national support policies , but because companies ranging in medical equipment, application of rare earth , between the three areas of high-tech to fight separately policy , funding and there are also bars the use restrictions . They are hoping to "free Sanda " support policies of integration into a " combined" to form a better synergies .
Either way, the current , inadequate application of rare earth industry has an impact on the sustainable development of the " bottleneck" factor. The consequent development of ideas of past industry profound reflection . Reflection as find a way out . Vertical integration of the industry is just trying to solve a real problem like the design . Perhaps, this design theory with a strong color , but it is the industry's inherent need a true reflection .
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