Investigation on the Market Development of Printing Ink Enterprises in China

Data speak

Let us first look at several sets of official data:
Data I: China's total ink production
Data II: Top 10 Chinese ink production in 2003
Data 3: Printing and Customs Import and Export Statistics of Printing Ink for the Whole Year of 2003

The data best describes the problem. From the above three sets of data we can draw the following points:

First, the total production

In recent years, China's ink industry has continued to grow at a steady high speed and its total output has continued to expand. Data show that between 2000 and 2003, China's total ink production showed a rapid increase. In 2003 it reached 203,900 tons, an increase of 19.3% over the same period of last year. According to relevant information, China’s total ink production volume has maintained its position as the world’s fourth largest, ranking top three in Germany, Japan, and the United States. On the basis of the continuous increase in total output, the variety of domestic ink products continues to increase, quality continues to improve, and grades continue to increase. At present, there are more than a thousand varieties of domestic ink, and the share of medium and high-grade products in these products has been continuously expanding. The quality of some products has approached or reached the level of similar foreign products. There are two reasons why China's ink production can continue to grow at a rapid rate: 1. The national economy is growing rapidly. The growth rate of gross domestic product (GDP) in 2003 was 9.1%, which led to the rapid development of the packaging and printing industry, which led to an increase in the demand for ink; 2. The continuous involvement of domestic and foreign companies and funds brought new technologies and Management directly boosts the production capacity of China's ink industry.

Second, the market structure
The ink market presents a “low-concentration and oligopolistic” structure. The scale of ink production companies is small, and the market share of individual companies is not high. According to the system, there are more than 300 ink production companies in China. According to data II, in 2003, among the top 10 companies in the country, there were 10 production companies with more than 5,000 tons, and more than 10,000 tons had 3 Home: The output of Tianjin Toyo Ink Co., Ltd. was 16,600 tons, accounting for 8.16% of the total output in the country: Hanghua Ink Chemical Co., Ltd. output was 14,300 tons, accounting for 7.04%: Taiyuan, Gao, and Lao Rui Ink Chemical Co., Ltd. was 13,900 tons, accounting for 6.81%, and no one company exceeded 10%. The top five companies accounted for only 30.58% of the total output. The top 10 companies also accounted for only 47.47%. Even from the perspective of the group of companies, DIC has the largest share, and its three companies: Shanghai DIC and Shenzhen Shenzhen. Japan and Taiyuan Gao's total production in 2003 was 28,100 tons, which also accounted for only 13.82% of the country's total. According to Bain’s analysis of the index of absolute concentration index, the domestic ink industry’s market structure is a competitive market structure, which belongs to the “low-concentration and omission-occupied” type. Compared with foreign countries, it is a low-concentration industry, which means that The threshold for entry into the company is low, and competition is fierce.

Third, foreign trade

Foreign trade is active. From data 3, we can see that in 2003, China's import volume of printing ink was 39,400 tons, export volume was 10,800 tons, and foreign exchange earned reached more than 0.45 billion US dollars. At the same time, another feature that has emerged is that imports have far exceeded exports. Although in recent years, China’s ink industry has further demonstrated strong growth momentum in the face of the new situation of China’s accession to the WTO and integration into the global economy, there is still a large gap between the supply and demand of domestic inks, especially high-grade. The larger ink gap has resulted in an increase in the proportion of imports and exports of ink in China in the past three years. In 2001, 2002, and 2003, the import volume was 2.55, 2.95, and 3.65 times of the export volume, respectively. In terms of import and export prices, the unit price of imports occupies an absolute advantage. In terms of black printing ink, the import unit price is 1.47 times that of the export unit price.

From the above three points can be extended:

● China's ink production market is in a stage of rapid development and differentiation. The ever-increasing demand and the “low-concentration and oligopolistic” market structure have determined that the entry threshold for enterprises to enter the market is low, providing domestic SMEs with a broad living space and attracting a large number of foreign companies and capital. Cruel competition has prompted the market to reshuffle and new market structures will gradually emerge.

● With the development of the economy and the improvement of printing levels, the demand for high-grade inks is increasing in the market, and the proportion of high-grade inks in the total ink production is increasing. The insufficiency of domestic enterprises in the production of such inks has led to the market share of high-grade inks being divided by imported inks and foreign-funded enterprises. Domestic small and medium-sized ink production companies are confined to the middle and low ink market. With the continuous development and expansion of foreign or private large-scale enterprises, their advantages will become more and more obvious. In order to gain a share in the market, vulnerable companies have to adopt price wars and other measures. The domestic ink market will appear within a certain range. For a period of disorderly competition, this situation will have an adverse effect on ink manufacturers.

Market competition is cruel, and the law of “survival of the fittest” will never change. Whether it is a foreign-funded enterprise, a private enterprise or a state-owned enterprise, no matter whether its scale is large or small, the market laws they face are the same. All they can do is adapt to this rule and do a solid job of product optimization. Manage and enhance competitiveness. Of course, different companies have different approaches. It depends entirely on their own whereabouts in the market. Therefore, in the process of planning this topic, we conducted in-depth investigations on some representative ink production companies and let them come out. From their actual experience, we can understand the market more deeply and realize our ink production in a more authentic way. The pressure and motivation of enterprises in the competition have more comprehensively grasped the development direction of China's future ink market. (to be continued)

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