Recycled aluminum enterprise cost control for survival

With the rapid economic development and the urgent need to conserve resources and protect the environment, China's renewable aluminum industry has developed rapidly in recent years. The output of recycled aluminum has increased from 1.3 million tons in 2002 to 4 million tons in 2010, with an average annual growth rate of More than 20%. Since the financial crisis in 2008, renewable aluminum has entered the era of low profit or no-profit, and how to survive and develop in the era of meager profits challenges all companies.

China's renewable aluminum industry development

Production and scale

China's recycled aluminum industry started late, and it took shape in the late 1970s. However, at the time, the industrial base was weak, and the scale of recycled aluminum was not large. Until the 1980s, driven by the strong demand for aluminum, China's recycled aluminum companies launched a number of small-scale renewable aluminum plants and home-plant companies that have mushroomed. Since the 1990s, foreign capital has entered China's recycled aluminum industry. The quantity of scrap aluminum imports and the export of recycled aluminum products have also been expanding year by year. China's recycled aluminum industry has begun to accelerate its integration with the international recycled aluminum industry.

With the rapid economic development and the urgent need to conserve resources and protect the environment, China's recycled aluminum industry has developed rapidly in recent years. The output of recycled aluminum has increased from 1.3 million tons in 2002 to 3.8 million tons in 2010, with an average annual growth rate of 21.37. The amount of imported aluminum scrap that matches the rapid increase in production of recycled aluminum increased from 447,700 tons in 2002 to 2,853,500 tons in 2010, with an average annual growth rate of 59.82%. The proportion of scrap aluminum imports in the production of recycled aluminum in the current year increased from 34.38% in 2002 to 75.09% in 2010. The domestic recycling of scrap aluminum increased from 640,000 tons in 2002 to 1.06 million tons (metal) in 2010, an average annual increase of 7.29%.

The new batch of recycled aluminum enterprises have a high starting point for investment, large-scale enterprises, and advanced technology and equipment, and have changed from the traditional family-style production model to the large-scale business model. At present, the annual production capacity of Shanghai Xinge Group Co., the leading company in the industry, has reached 650,000 tons. It is expected that by the end of the “Twelfth Five-Year Plan” period, China's recycled aluminum industry will cultivate a large number of enterprises with advanced technology and equipment, and the output of recycled aluminum will reach 5.8 million tons.

Industry profits and prospects

Since the financial crisis in 2008, renewable aluminum has entered the era of low profit or no profit. Before 1995, the production of recycled aluminum was profitable, and the average industry profit rate was up to 10%. With the intensification of competition, the current industry average profit is less than 3% or less. How to survive and develop in the era of low profit tests all companies. How to reduce manufacturing costs, procurement costs, and gain competitive advantage are issues that companies must face.

The competitive advantages of aluminum scrap have weakened and the aluminum recycling companies are undergoing tests. China, as the world's largest consumer of aluminum scrap, has high dependence on the international market. With the continuous increase in the price of international primary aluminum, the price of international scrap aluminum has also risen. China's waste aluminum imports are in a dilemma. Under this background, China's primary aluminum enterprises have joined the cast aluminum alloy competition on a large scale, which has adversely affected the recycled aluminum industry. In the market environment that is not yet standardized, there is a phase-out mechanism in the recycled aluminum industry. If the policy is still not adjusted, it may be the advanced enterprises with high investment costs that will first be defeated.

Key points of cost control for recycled aluminum

According to incomplete statistics, waste aluminum raw materials account for about 80% of the cost of recycled aluminum manufacturing, which is the main bottleneck restricting the survival of enterprises. At the same time, waste aluminum raw materials are extremely unstable, and the variety and composition of active ingredients vary greatly. These factors pose serious challenges to the cost control of recycled aluminum. This is also the biggest difference between the production and management of recycled aluminum industry and alumina and electrolytic aluminum industries.

As waste aluminum accounts for up to 80% of the total cost of recycled aluminum manufacturing, in the operation and management of recycled aluminum enterprises, how to reduce the purchase cost of waste aluminum raw materials and ensure adequate quantity of high quality and low cost aluminum scrap raw materials will be a constraint on recycled aluminum enterprises. The most critical factor for the economic operation and long-term development. The variety of waste aluminum raw materials varies greatly and the effective ingredients vary greatly. These factors determine that the production of the recycled aluminum industry can not achieve the scale operation of a single product variety, especially due to the large differences in the metal composition of the various types of waste metal, and slightly during the batching of the entire production organization. Inadvertently, it will cause the production of waste products. Therefore, how to reduce the cash processing cost of recycled aluminum products, in particular, how to solve the problem of ingredients in the production process of recycled aluminum through scientific and effective methods will be the most critical factor restricting the economic operation of recycled aluminum enterprises.

To sum up, in the operation and management of the recycled aluminum industry, how to reduce procurement costs and how to solve the scientific burdens of scrap aluminum raw materials to reduce cash processing costs have become two major issues in the management and management of recycled aluminum.

Recycled aluminum cost control method

In China, after nearly 40 years of development, the reclaimed aluminum industry has been accumulating and summarizing over the years in the two major themes of procurement costs and scientific ingredients, and the most important cost control has been achieved by leading companies such as Shanghai Xinge and Taicang Yiqiu in the industry. The method is:

Eliminating Bottleneck Constraints of Waste Aluminum Resources Guarantee

The establishment of foreign waste metal recycling companies is an inevitable way to solve the problem of raw materials, but also the successful experience of companies in the same industry. In order to establish a reliable aluminum supply channel and effectively prevent procurement risks, most of the domestic aluminum recycling enterprises have set up their own scrap metal trading companies in Europe, the United States, Russia, Hong Kong and other places, directly engaged in the primary market recycling business, and their waste processing. The procedures for monitoring, loading, collection, and customs clearance are all handled by themselves. In addition, within the various domestic reclaimed metal parks, the imported aluminum scrap trading company with a certain scale also set up scrap metal recycling agencies abroad, and has low-cost possession of foreign scrap aluminum resources to obtain profits from it. At present, Shanghai Xinge and Taicang Yiqiu and other enterprises not only guarantee the quantity of imported waste, but also their prices are better than the average market price.

Establish a domestic waste metal recycling station, or form a strategic alliance with “resource holders”, occupy a place in the domestic waste aluminum recycling market, and have the right to speak in the recycled aluminum market. Cooperate with existing domestic waste aluminum resource owners to form a strategic alliance with them, use their existing resource channels and resources, and further expand resource channels on this basis to enhance their anti-risk capabilities to jointly resist the market Risk, achieve mutual benefit and win-win. The main purposes are two: First, through their cooperation to achieve preferential tax policies for welfare enterprises in the domestic waste aluminum raw material market to reduce production costs; Second, through the cooperation between the two sides to complement each other in order to achieve both the size and long-term business goals to be pursued.

Build Product Marketing Network

Through the competitive salary, the professionals engaged in the procurement of scrap aluminum and the sales of alloy products are established to establish a corporate marketing strategy management team, and on the basis of systematic research and analysis of the aluminum scrap and alloy product markets at home and abroad, the company wastes Aluminium resource procurement seeks direction, seeks solutions, and builds a product marketing network.

Scientific ingredients for scrap aluminum

In order to reduce the cash processing costs of enterprises in the production process, the scientific raw materials for scrap aluminum must be scientifically solved in view of the characteristics of waste aluminum raw material varieties and large variations in effective ingredients. For the recycled aluminum industry, raw material pretreatment is the key link that restricts continuous and stable production and cost reduction and efficiency increase, and it is also one of the most important basic tasks for solving scientific ingredients. Therefore, it is necessary to increase and improve the pretreatment capacity and level of waste aluminum raw materials, such as the automated sorting system for magnetic separation and vortex selection, etc., to improve the quality and efficiency of separation, and to prepare for scientific ingredients and continuous stable production. . The lean management of the waste aluminum raw materials is implemented. The pretreated aluminum waste materials must be stored and stored in different categories. Before and after pretreatment, the waste aluminum raw materials must be accurately tested and analyzed to lay the foundation for computer science ingredients.

Focus on market strategy

Adjustments have been made to strengthen market research and judgment, and general trade and processing have been implemented on two legs in production organization and marketing operations to enhance the ability to withstand market risks. Through the statistical analysis and analysis of the operational data of the recycled aluminum industry in the past five years, the author found that before the first quarter of 2006, imported waste aluminum and its products had a price difference of around 4,000 yuan per ton, and general trade and incoming materials processing could be operated; 2006 From the third quarter of 2007 to the third quarter of 2007, the general trade and processing of incoming materials can not be operated; in the second quarter of 2006 and from the fourth quarter of 2007 to the third quarter of 2008, only the processing of incoming materials can be operated; through the statistical arrangement of historical data, general trade and The proportion of processing of incoming materials, from the time point of view, is 4 to 6; for enterprises with a certain scale, the business volume plan is generally 5 to 5, and the specific operation will be adjusted according to the changes in the market. In the actual operation of leading enterprises such as Shanghai Xinge and Taicang Yiqiu, the two-way adjustment of processing and general trade has been realized, and the ability to resist market risks has been enhanced.