Industry Observation | Hibernating or lying down? A brief analysis of the survival prospects of the wood plastic industry in 2024

I once thought that all the “blame” that could not be shouldered could be dumped on the new crown. Who would have thought that the new crown would break away from mankind so easily, leaving so many people and so many industries in a state of confusion and confusion?

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However, alternative news came at the end of the year. The China Securities Regulatory Commission recently issued an approval for the registration of the initial public offering of Meixin Technology Co., Ltd. (referred to as “Meixin Technology”). It is reported that Meixin Technology plans to be listed on the GEM of the Shenzhen Stock Exchange. This IPO plans to raise 958 million yuan. This is the largest fund-raising amount for a wood-plastic company since the wood-plastic project was launched in China. It may give people a sense of uncertainty. The wood plastic industry brings a glimmer of hope.

It was originally thought that after the epidemic is over, the export trade situation, which is the largest pillar of China’s wood-plastic industry, will improve – because all obstacles to epidemic prevention and control have been eliminated, and the natural demand for wood-plastic materials around the world still exists. Who knew that 2023 would still be a “small year” for the wood plastic industry!

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However, the problems facing the wood-plastic industry go far beyond that. According to the statistical data of the “Floor Index Enterprise Report” released by the China Forest Products Industry Association in 2023 and the on-site survey of the Wood-Plastic Special Committee, flooring accounts for more than 90% of the current wood-plastic outdoor product system. In other words, for most wood-plastic companies, wood-plastic products = wood-plastic flooring. Of course, there is nothing wrong with this understanding or layout. After all, this is the innate gene of the wood plastic industry. What first gave rise to the advent of wood-plastic outdoor flooring was the demand for the construction of the US Navy Pier, and Trex (a US company), the world’s largest and most successful wood-plastic company, is the largest manufacturer of wood-plastic outdoor products.

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But this has also become the biggest reason why China’s wood plastics have never been able to take advantage of the advantages of wood plastic composite materials.
The author has put forward more than once: Wood-plastic outdoor flooring is indeed the best stepping stone for wood-plastic composite materials, but will wood-plastic flooring be “a road to darkness” after knocking on the door? The reason why wood plastic outdoor flooring (Decking) is so popular in Europe and the United States is because of the national conditions and customs of developed countries and regions – they have a large number of villas that require supporting facilities; they have the conditions to carry out more outdoor activities; they pay more attention to the environmental protection of materials performance and functionality… But in China, this is still a relatively long road – the largest application of outdoor wood plastic products should be municipal garden projects, and the repayments for similar projects are worrying and even daunting. .

When wood-plastic outdoor materials are in a dilemma, wood-plastic interior materials have made their debut. Originally a green cloak with resource, environmental protection and technology, wood-plastic interior materials were prepared to take advantage of the situation. But unexpectedly, in the midst of the excitement, the real estate industry suffered a huge collapse, marked by the collapse of Evergrande Group. It was a good thing that it didn’t hit you in the foot. Who would dare to make a living in this bloodbath? According to the research results of the special committee and the in-depth experience of manufacturers – in the current economic environment, the further away from the real estate field, the greater the safety factor. The ancients said: “A gentleman does not build dangerous walls, does not walk on unfamiliar roads, does not enter deep waters, and does not sit in a hanging hall.” How can we do the opposite?

It is not difficult to see that from far to near, from small to large, from the three years of the epidemic to the post-epidemic period, the wood-plastic industry has been stumbling, with almost no real time to breathe. Whether it is the unreasonable rise in the price of resin materials, the difficulty in finding a container of ocean freight, low-price dumping like a road robbery, or naked tariff interception… In all these cases, wood plastic companies have to contend with One’s own customers or partners are coping with the situation with trepidation and experiencing difficulties. No: Overseas transportation has just stopped for a period of time, and because of the fighting between the Houthi armed forces in the Red Sea, we are preparing to detour through the Cape of Good Hope. The problem is that the Cape of Good Hope does not bring real good hope! In such difficult days, shouldn’t wood plastic companies learn from the experience and heal their wounds in time?

Wood-plastic composite materials originated in North America and have been commercially promoted and applied for nearly 50 years. In comparison, although Chinese wood plastics are young, foreign wood plastics may not necessarily be ahead of Chinese wood plastics. We once commented like this: The leaders in the domestic wood-plastic industry have used the intelligence and wisdom of the Chinese to make this once “imported product” prosperous, making the young wood-plastic composite manufacturing industry one of the most popular manufacturing industries in China. One of the few industries that enjoys equal rights to dialogue with manufacturers in developed countries such as Europe, the United States, and Japan, it has laid a solid foundation for its promotion and popularity around the world.

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