Embarrassment of China's dairy companies: more profitable accidents

The path of survival for small and medium-sized dairy enterprises “has already been enough for a long time, with thin profits and many accidents.” Chen Fangjun described his impressions and feelings on the dairy product industry in his own office.

Chen is the chairman of Shandong Kangzhiduo Biotechnology Co., Ltd. (hereinafter referred to as Kang Zhiduo). Three years ago, in the face of the current environment for the survival of dairy product manufacturers, Chen Fangjun may not be able to sit back and find a good home for his company. Or shut down, and in fact, in this industry's rigorous assessment, he and Kang Zhiduo are not surprised.

"As SMEs must have their own characteristics in order to better survive." Chen Fangjun explained. However, this does not mean that the path to its business is smooth.

Before 2008, Chen Fangjun’s dairy production companies were the same as other local dairy companies. Their products followed the domestic industry’s large companies. The price war that followed it was Chen Fangjun’s “blood scars”. In 2008, Chen Fangjun changed his strategy, invested 8 million yuan, completely changed the original product model, and developed functional active lactic acid bacteria.

“After years of development, the traditional dairy industry has matured and has been divided up by large domestic or local companies, forming a certain market monopoly, and small dairy companies cannot compete with them.” Chen Fangjun said in an interview with a new financial reporter that the dairy industry has developed in an all-round way. Good opportunities have passed. Small and medium-sized enterprises have small output, and it is difficult to form a scale. In terms of quality, scale, market share, brand, etc., especially in terms of brands, they cannot compete with monopolistic enterprises. This requires the enterprises to refine their own markets. Differentiation seeks survival.

Chen Fangjun introduced that the current national policy and corporate standards are further subdivided. The functional active lactic acid bacteria are milk-based carriers, similar to biological agents, and their own enterprises are not listed in the country's review. In the eyes of Chen Fangjun, small and medium-sized dairy enterprises facing difficulties can choose to make a transition to development. “At present, what my company lacks is popularity.” Chen Fangjun said that such products accounted for 80% of the dairy products market in foreign countries, and only 5% in China.

Chen Fangjun is not an example.

After the Spring Festival, Shi Haizhuang, chairman of Shijiazhuang Xinshida Dairy Products Co., Ltd. (hereinafter referred to as the New Star Dairy Company), was more busy this time than in previous years, and his busy job was to supervise production.

“Our market positioning is Shijiazhuang (market), product positioning is fresh milk.” On February 17th, Hao Haishun stated to the new financial reporter that there are always small and medium enterprises accompany large enterprises to seize the market, which requires small businesses to identify themselves. The orientation and development direction.

According to the information provided by NSI, NSK Dairy is one of the earliest professional manufacturers of liquid milk in Hebei Province and even in China. The total assets have exceeded 80 million yuan. The products include pasteurized milk and UHT milk (UHT). ), fermented yogurt three series of 20 varieties. “Now is focused on liquid milk processing.” Yan Hailu introduced, but this time invested only more than 3 million yuan in factory monitoring capabilities, further standardize the production facilities.

It seems that in the face of severe assessment, SMEs are not all "weak."

Yuan Yunsheng, Secretary-General of the Hebei Dairy Association, believes that there are many local dairy brands in Hebei and in the country. It is impossible to die in a one-size-fits-all manner or to rectify and integrate them to give full play to their own products and markets. If we pass the review and identify the positioning, we will have better room for development in the future. “(Hebei Dairy Industry Association) will recommend the government to formulate and adopt appropriate supportive policies for small and medium-sized enterprises according to the actual situation of the company.” Yuan Yunsheng disclosed to the new financial reporter that the re-use and integration of the effective assets and the settlement of corporate assets, personnel, etc. problem.

Second and third-line brand capital impulses On November 22, 2010, Mengniu invested 462,000 yuan to acquire the 51% controlling stake in Shijiazhuang Junlebao Dairy Co., Ltd. (hereafter referred to as Junlebao Dairy), which is the largest scale of China's dairy industry in recent years. a brand acquisition. After the completion of the transaction, "Jun Le Bao" and its affiliated brands will continue to exist and develop as independent brands.

According to relevant information provided by the Hebei Dairy Association to the new financial reporter, Junlebao Dairy was founded in 1995 and now has 9 production subsidiaries and more than 4,200 employees. It is the largest base for production of sour milk in North China. In 2009, Junlebao realized sales revenue of 1.26 billion yuan, of which low-temperature yogurt accounted for more than 84%. Junlebao brand influence ranks first in Hebei Dairy Industry, fermented lactic acid bacteria beverage market share ranks first in the country, and sour milk market share ranks fourth in the country.

“The purpose of this time is to seek a bigger financing platform, expand its brand influence, and seek to go public.” Hebei Milk Association, relevant analysts said that as the second and third line brands, in hand the domestic dairy giant, relying on its technology , capital, and management support can enable companies to develop rapidly in a relatively short period of time. This is also seen as a microcosm of the industrial restructuring or the combination of strong companies.

Many second- and third-tier local dairy companies and brands have shown greater impulses, and leveraging the capital market has become a shortcut.

According to the person in charge of the aforementioned China Dairy Industry Association, since 2010, Yashili, Heilongjiang Global Dairy and other companies have entered the capital market, and Ningxia Xiajin, Chongqing Tianyou and other brands are also accelerating the pace of listing. The latest news is that Global Dairy has been successfully listed and has become a successful model for the development of second- and third-tier brands.

“China's dairy industry is in a difficult transitional period and needs a painful process. As each company is suffering, it seeks different ways to create a healthy development.” The above-mentioned person in charge said that the current homogeneity of milk companies is serious and there is no difference. Deep-processed products, especially second- and third-tier brands, should also seek new profit growth points and take the “Blue Ocean Strategy”. Capital financing has become a prerequisite.

International Capital peeped at a phone call from Shanghai, so that the Secretary-General of the Hebei Dairy Association Yuan Yunsheng worried.

Since the introduction of the new regulations on the reexamination of dairy companies, the Shanghai-based foreign capital institution has been actively liaising with Yuan Yunsheng, actively seeking investment and mergers and acquisitions of small and medium-sized enterprises in the province.

This international capital contacted Yuan Yunsheng more than once and requested to meet and discuss in detail. In fact, Yuan Yunsheng received similar phone calls not only from Shanghai. As the country's third largest dairy province in Hebei, the integration of milk companies has undoubtedly attracted more attention from international capital.

“Now the big environment is undoubtedly opening the door to international capital, with more weaknesses.” Yuan Yunsheng deeply worried about this, domestic consumers have doubted domestic brands so far, had no choice but to choose foreign brands, resulting in high-end market share of foreign brands The rate rose from the original 30% to 80% today. An official from the Ministry of Agriculture recently disclosed such a set of data: During the first 11 months of 2010, the total volume of imported milk powder reached a record high of 370,600 tons. Looking ahead to 2011, the market share of imported powdered milk will exceed 50%. More than half of Chinese infants consume imported powdered milk. Yuan Yunsheng believes that if the dairy market is controlled by international capital, it will revert to the domestic soybean market.

Yuan Yunsheng analyzed with the new financial reporter that the New Deal will play a major role in rebuilding the market confidence of domestic dairy enterprises, accelerating the regulation of the dairy industry, purifying the market, reducing the occurrence of dairy product safety accidents, and ensuring the safety of dairy products and foods. At the same time, it accelerated the progress of the survival of the fittest in the dairy industry, and provided opportunities for first-line dairy companies such as Mengniu, Yili and Guangming to accelerate the pace of mergers, acquisitions and integration.

“This is also an opportunity for domestic brands to reshape their image and fight against the further intrusion of international capital.” The person in charge of the China Dairy Industry Association stated that this should be an overall strategic project that requires national policies, industry support, corporate unity, and improvement. The competitiveness of the entire industry minimizes the impact of foreign capital.

It seems that Chinese dairy companies now face not only internal worries but also external problems.