China Fasteners Growth by 4% - 5% in 2009


In 2008, the global financial turmoil has placed unprecedented pressures on China fastener industry: sales decline, profit squeezes and exports slump. There is a huge challenge to China fastener industry.

According to China Fastener Industry Association, the growth of production and sales of China fasteners may be lower than 5%, which awakes China's fastener industry from the sweet dream of continuous rapid growth. What's worse, the year 2009 seems to be much tougher for China fastener industry.

On Jan. 1, 2009, some Taiwan-fund enterprises of fastener forming equipment, such as Zhejiang Yeswin Machinery Co., Ltd., Zhengyou Machinery (Shanghai) Co., Ltd., Shanghai Chunri Metal Product Co., Ltd., Shanghai Dali, etc., carried out the measures of stopping production and taking a holiday, instead of the previous measures of employees taking a holiday but machines still working. At the same time, the enterprises will put forward an activity to cut cost urgently:to start with the design part, producing parts of small size and light weight to increase the utilization of raw materials and deal with the company's deficit through these measures. These measures are significant for China fastener enterprises:Firstly, people will consider that the strategies are made under the economic downturn. However, this management method suggests that the new generation of China fastener entrepreneurs now pay attention to the financial part and the quick decision making. Affected by the global financial crisis, the growth rate of production and sales of China fasteners may be lower than 5% in 2008, which is the year with the lowest growth in the recent decade. What's worse, it's estimated that the industry will grow by 4% - 5% in 2009, which is even lower than that in 2008. It also suggests a progress that the fastener enterprises get through the global financial turmoil rationally.

The insiders analyzed that on one hand, the fastener sales of 2008 were cut and dried and some companies hesitate to draw up a plan for 2009. However, as for the mid and long term, there is no doubt that there will be growth in China domestic market. On the other hand, even though the prices of such raw materials as steel, oil and mould may go down, the profits of 2009 will still fall dramatically because of the excess production capacity, especially some small and medium-sized enterprises competing with others in lower prices. Therefore, China fastener industry will enter a new adjustment phase in the coming two to three years because the much fiercer competition in China fastener industry will accelerate the natural selection of the fastener enterprises.

Although China has been launching a package of policies to promote economic growth and expand domestic demand, these policies may not have obvious effect till the second half of 2009. Therefore, chances that there will be a strong growth of China fasteners in 2009 are slim.

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