The Status Quo and Development of Chinese Coated Abrasives in ASEAN Countries

Abstract Member of the Expert Committee of the Coated Abrasives Branch and Chairman of the Guangzhou Sanya Abrasives Co., Ltd. Association of Southeast Asian Nations (ASEAN). to make...
Member of the Expert Committee of the Coated Abrasives Branch, Liang Shaocheng, Chairman of Guangzhou Sanya Abrasives Co., Ltd.
Association of Southeast Asian Nations, referred to as ASEAN. Member countries include Malaysia, Indonesia, Thailand, the Philippines, Singapore, Brunei, Vietnam, Laos, Myanmar and Cambodia.
Its predecessor was the Southeast Asian Union, which was established in Bangkok on July 31, 1961 in Malaya (now Malaysia), the Philippines and Thailand.
On August 7-8, 1967, the four foreign ministers of Indonesia, Thailand, Singapore and the Philippines and the Malaysian Deputy Prime Minister held a meeting in Bangkok and issued the "Bangkok Declaration" (the "Declaration on the Establishment of the Association of Southeast Asian Nations"), officially proclaiming the establishment of the Association of Southeast Asian Nations.
Due to the role played by ASEAN in promoting economic growth, the organization has gradually become a regional organization with certain influence. In addition to the five founding members of Indonesia, Malaysia, the Philippines, Singapore and Thailand, after the 1980s, Brunei (1984), Vietnam (1995), Laos (1997), Myanmar (1997) and Cambodia (1999) Years) The five countries have joined ASEAN, making this organization cover the entire Southeast Asia region. At present, it has formed a group of 10 countries with a population of more than 500 million and an area of ​​4.5 million square kilometers.
With the gradual stabilization of the political situation in ASEAN countries, the advantage of having a very cheap labor force has gradually been withdrawn. Developed countries such as Europe, the United States, Japan and South Korea, as well as Taiwan, Hong Kong and even domestic enterprises, have accelerated the pace of industrial transfer. For example, Nike and Adidas set up factories in Indonesia and Cambodia, Samsung and Foxconn in Vietnam's Beining and Taiyuan provinces. Coupled with the wealth of resources of the ASEAN countries, such as mahogany, latex, minerals, etc., investors are eagerly awaited. All of these factors have led to a significant increase in the demand for abrasives for industrial teeth and have maintained substantial growth.

I. Status of coated abrasives in ASEAN countries
The initial demand for coated abrasives in ASEAN countries is mainly based on wood in the region. However, with the entry of multinational companies, the demand for coating for various industries has grown rapidly. For example, Toyota and Honda in Thailand and many branches that have been derived. Due to the turmoil in the ASEAN countries, the regional development is extremely unbalanced. For example, in Thailand, since the wars in World War I and World War II, there is no war in the country, and the country's abrasives manufacturing industry has always been at the leading level in Asia. I have visited Austria, Germany, Taiwan, and Japan in the country's production enterprises, optical machinery and equipment is enough to make the domestic industry's leader shame. Vietnam, our neighboring country, is developing rapidly, and a large number of grinding industries such as South Korea, Taiwan, and China have entered. It has intensified the competition for abrasive products in this region.
In ASEAN countries, the demand for abrasive cloth, abrasive belt, sandpaper, scouring pad, page wheel, non-woven products, sandpaper and saucer is very strong. The market is gradually diversifying at two levels. High-end products are mainly based on European, American and Japanese products, followed by products from South Korea and Taiwan. Although China is a major exporter of abrasive products, its products are at the very end. The demand for coated products in ASEAN countries is mainly targeted at the region's flagship products, namely wood, jade, stainless steel and alloy products. The region has been able to manufacture thousands of wheel, hundred-page wheel and belt conversion, and most of the product quality has exceeded the same price in China.

Second, the status quo of China's coated abrasive products exported to ASEAN countries 1. Export growth rate is relatively large
Chinese products have maintained rapid growth in exports to ASEAN countries in recent years. According to incomplete data from customs, the first half of 2016 increased by nearly 16% over the same period last year. The export products are mainly sand cloth, accounting for 50% of the total amount of coated abrasives, followed by sandpaper, accounting for about 38% of the total, while other products account for about 12%.
The top three exporting countries are Indonesia, Vietnam and Thailand. Among them, Vietnam has the fastest growth rate. Cambodia and Myanmar are growing faster than other ASEAN countries.

2. Structure of export products
Although China's coated abrasives have developed rapidly in ASEAN countries, great progress and achievements have been made. But there are still many problems. The main points are as follows:
1 The product structure is very unreasonable.
Mainly low-end products, counterfeit products. The same industry has low-cost vicious competition and the profit is extremely low. For example, a hundred-page film, the current target price of buyers in the region to buy in China is not more than 1 yuan (plastic cover calcined products).
2 Insufficient independent innovation and less self-owned brands.
At present, most of the coated abrasive products in the region are produced domestically. However, Chinese is rarely seen on trademarks and packaging, and domestic brands are not seen. Customers are not asking for counterfeit European and American products, they just want to play their own brands. The author has visited customers in several countries. They said that Chinese brands are basically not bought by people, or they can't afford to sell at all, and no one even buys them. This makes the author very sad.
3 Product quality is unstable, and Chinese manufacturers have poor credit.
The big problem of the self-products just mentioned is that the quality of the products is unstable, good once and bad once. At first, the dealers who chose to operate Chinese brands were not forced to give up because of the unstable quality of the products. For example, a famous brand of emery cloth in China was sold very well in Indonesia at first. Later, due to the large amount of goods released to other dealers in the country, it is basically only able to do OEM production, and the quantity is not as good as before.
4 Chinese manufacturers' own development problems Due to the serious homogenization of domestic coated products, the surplus of low-end products, and the sluggish global economy in recent years, Chinese manufacturers often choose low-cost vicious competition. The author has discovered this year that a large number of Chinese manufacturers have actually made a large amount of credit for dealers in the region in order to seize the market without any guarantee. This phenomenon is not a case, but a large number. Moreover, this phenomenon of credit is not only found in ASEAN countries, but also in the Middle East and even in Africa. It allows dealers to sell goods and then check out. A large number of foreign dealers have defaulted this year, especially in Vietnam, Cambodia and Malaysia.

Third, China's coated abrasives manufacturers in the development of ASEAN countries I see
1. Increase research and development and innovation. In particular, product manufacturers, do not blindly follow, can not compete at low prices. Business operators should go out to understand the market, especially in the middle and high-end market, increase research and development, occupy the middle and high-end market, and have a foothold.
2. Increase the development of independent brands. Fully communicate with dealers, introduce independent brands, and strive to maintain product quality and strengthen after-sales service. Cooperate with dealers to carry out advertising and promotion measures and measures. This can be learned from the hand tool industry. For example, in Vietnam, Cambodia, Myanmar and other countries, the author has found that the current manual tool industry has basically been based on Chinese brands. There are several tool brands in China, which can already be used in the region and European and American brands. competition.
3. Go out boldly. Make full use of the cheap labor and foreign introduction policies of ASEAN countries to set up factories or offices in ASEAN countries. There are already many successful cases, such as a Chinese sanding belt conversion factory in Vietnam, which has already sold more than 60% of the market in central and central Vietnam. A Sino-Korea joint venture sandpaper factory in Surabaya, Indonesia has occupied Half of Indonesia's local market.

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