The incentive and supportive policies issued by the state to revitalize the equipment manufacturing have created opportunities. Especially the promulgated Regulations on Implementing the Planning for Restructuring and Revitalization of Equipment Manufacturing, which relates to the pump industry, can guide the producers of spare parts to position themselves in a specialized, fined and peculiar area.
As the efforts of policy promotion are strengthened and the social demand for water quality improvement becomes strong, the market of stainless steel pump with high energy efficiency and minimal secondary contamination welcomes the development opportunities. In 2011, the total domestic output of water pumps reached 97.39 million pieces and that of pumps for non-agricultural purpose 25 million pieces. As calculated, the sales volume of stainless steel pump accounts for less than 18% and its conservative alternative space is 2-3 times of its current market size (in consideration of the rise of market rate for non-agricultural pumps to 50-60% and the replacement of some agricultural pumps). In the years to come, this industry is expected to maintain the growth at 20%.
China's submersible pump industry has been booming under the support of China’s policy in the 12th Five-Year Plan period. The strong support of the state to a number of sewage pump enterprises also conduces to the construction of sewage discharge pumping stations in the cities. The progress of stainless steel pump replacement is expected to accelerate.
During the 12th Five-Year Plan, China’s pump valve industry played a guiding role in the development of new industry. The resource-saving and environment-friendly society is the future development direction of the pump valve industry. The reduction of orders and the rise in price of materials happened to our pump valve enterprises during the financial crisis. This gives rise to the survival of fittest within the industry and eliminates some enterprises of outdated capacity, but enables the pump valve industry to develop better without any burdens.
In 2002 there existed 598 pump manufacturers above designated size all over the country, of which output amounted to 17.4474 million units, total industrial output value 16.162 billion Yuan, sales income 15.086 billion Yuan and profits 814 million Yuan. According to the industrial statistics from 147 key enterprises, in 2002 they achieved the total industrial output value of 6.053 billion Yuan, an increase of 18.52% over the previous year; the sales value of 6.053 billion Yuan, an increase of 15.26% over the previous year; the industrial added value of 1.91 billion Yuan , an increase of 18.62% over the previous year; and the shipment value of 669 million Yuan, an increase of 22.42% over the previous year. In 2003 enterprises in the pump industry achieved the total industrial output value of 20.8 billion Yuan, an increase of 26.8%.
Its quarterly revenue is expected to be on the new scale
In the 2nd quarter of last year, the Company achieved the quarterly income of 200 million Yuan for the first time. Its income is expected to exceed 300 million Yuan in the 4th quarter of this year. It occupies 13-15% of market share for stainless steel pumps. Presently, more than 50% of the market share is in the hands of international brands and there exist a large number of pump enterprises with income below 100 million Yuan, so the Company has the potential of substitution in these two aspects. Scale effect is its important competitive advantage. On the other hand, it has made significant progress in product diversification. It is expected to obtain a new development in the markets related to industrial pumps and sewage pumps.
Its business for Industrial pump grows rapidly
Since the Company acquired Nanfang Changhe Pump Industry Co., Ltd. last year, it has scaled up through investment increase on one hand and improved management, R&D and marketing on the other, having its products accepted gradually. This year, it received the big order of 50.00 million Yuan from Iraqi Ministry of Water Resources and won over some high-end customers including NASA. In the future, on making efforts to increase overseas sales, it will strengthen the exploitation of the domestic markets for high-end industrial pumps. This year it will achieve profitability at BEP of ~ 50.00 million Yuan/A. Besides, its project for sea-water desalinization pumps of 12,500 tons will be completed. With the development of sea-water desalinization pump market, it will surely have the promising long-term prospects. In addition, it is thus clear that the demand for small sewage pumps in South China is closely related to the development of the environmental protection industry.
From periodicity to growth
The market tends to link the periodicity of real estate with the company intuitively to understand that 20% of the company’s income comes from water supply, 20% from water treatment, 15% from heating and ventilation, 15% from industrial purpose including pharmacy and 30% from others. The current growth of stainless steel pump market and the company’s business comes more prominent. Plus its stable financial status and strong cost-control capacity, the company will win sustainable increase in its performance in the years to come.
In China’s pump field, it is a top priority how to break the pattern and completely solve the difficult problems of leakage in home-made pumps through starting China’s pump brands and really making China’s pumps beyond the international advanced level, in which the chemical pumps and sewage pumps used in key technical equipment seriously depend upon import.