Although news reports have been advocating that China's economy has picked up, from the actual situation, the economic situation is not optimistic. Recently, various industrial capital chains have been broken in many places, and many companies in various industries have closed down, whether it is steel or real estate. In fact, the wire and cable industry is no exception, but perhaps because the wire and cable industry is only a supporting industry of the power industry, the attention is not as high as that of steel and real estate, so there is not much media coverage. However, from the actual situation observed by the author, the situation of cable companies is indeed not optimistic.

As a wire and cable industry with high capital requirements, the capital problem is the most serious problem. To know that wire and cable is the material heavy industry light industry, the demand for raw materials is the core problem, and as a raw material of copper more than 50,000 tons of the price is very expensive, so the capital problem is the core problem of the wire and cable industry. Once the capital chain can not keep up, a cable enterprise will soon be on the verge of bankruptcy, because there is no money to buy raw materials, can only be out of stock, and downstream power enterprises can not deliver orders, and will face various serious consequences. Wire and cable companies are in this sandwich layer.

Whether in Anhui Wuwei, Hejian, Hebei, Yixing, Jiangsu, Henan, Shandong and other places, many small and medium-sized wire and cable enterprises have recently closed down because of the broken capital chain, and many large wire and cable enterprises have been in a situation of extremely tight funds, but they have not had time to attack for a while. This situation makes people worried about the development of China's wire and cable industry. The capital problem of the wire and cable industry is really a rope stuck on the neck of the cable enterprise. If the rope is not untied for a day, the wire and cable enterprise can only be subject to the capital problem and cannot breathe freely.

Why are wire and cable companies so constrained by capital issues? There are both the cable industry's own attributes, but also many external reasons. First of all, the payment method in the wire and cable industry is unreasonable. Compared with purchasing units, especially large customers such as power grids, wire and cable enterprises still lack the right to speak, and problems such as slow payment and difficulty in payment for a long time are seriously highlighted. For a long time, whether it is the "3-6-1" mode or the "2-5-2-1" mode, I .e. 20% advance payment will be paid after the contract is signed, 50% will be paid after the product is delivered, 20% will be paid after the product is installed, and the remaining 10% will be paid off after the warranty period expires as a quality deposit.,Caused by the wire and cable production enterprises to pay back slowly, even difficult to pay back. The payment of advance payments is even more elusive. Because the general procurement unit is unwilling to pay the advance payment, even before the advance payment, the supplier is required to provide an advance payment guarantee, delaying the payment of the advance payment. Some contracts stipulate that the delivery period is 20 days, and the advance payment is paid within 30 days after receiving the supplier's advance payment guarantee, because the advance payment guarantee takes at least one week, and the customer pays the advance payment after more than 30 days, and often the advance payment is still not paid until the delivery is in place.

Not only is the payment method unreasonable, but even the recovery of the payment will take a lot of trouble. After the arrival of the wire and cable, the purchasing unit shall pay the amount to the supplier, but the purchasing unit requires the supplier to provide the original, certificate, warranty and other materials of the delivery receipt again (the actual supplier has provided when the goods arrive), and then pay the purchase price. There are also many installation companies or general contractors who require the owner to pay and then pay the supplier. These actions have delayed the payment of the goods. Due to the deliberate delay of customers, the period of cash on delivery of wire and cable products is generally as long as 3-4 months.

The problem of the difficulty of payment is also manifested in the unclear payment time agreement. This phenomenon is often caused by the purchasing unit. For example, when signing a contract, purchasing units often require payment after the completion of the project, electricity, installation and commissioning, etc., many major projects even require the project to complete the final accounts before settling the balance, these payment links are beyond the grasp of the enterprise. Especially for some long-cycle projects, payment is required after all the goods are delivered. This payment method allows the supplier to advance a large amount of production funds, which undoubtedly increases the financial pressure on the supplier. For example, for government projects, there is generally no advance payment, and enterprises have to schedule production and delivery according to the schedule. After delivery, they have to be owed payment again, which greatly increases the financial pressure on enterprises. Another example is some transportation projects, due to the long construction cycle, from the beginning of the first batch of supply to the end of the last batch of supply, the supply cycle may be as long as one year, in case of special circumstances, the cycle is longer.

Warranty:
At present, wire and cable enterprises pay about 20%-30% of the total payment for goods, and the proportion of this part of the funds is not small. It can be said that the profits of wire and cable enterprises are completely dependent on the warranty, and the upfront payment is only less than the cost price. If the enterprises default on the warranty, then the wire and cable enterprises will definitely do it for nothing and will lose money, because the profit margin of the cable industry is only 3%, if you can't get the warranty of 2% 30, you are naturally losing money. Wire and cable belong to material products, should not be like equipment products that pay warranty, but at present most purchasing units will still require cable manufacturers to pay 5%-20% warranty. In the contract, the customer requires that the warranty payment be paid 1-2 years after the completion of the project acceptance or installation and commissioning, but the specific payment time has not been determined, so it is normal for the warranty payment to be in arrears for 2-3 years..

It is undeniable that many cable companies have situations such as untimely provision of technical information and delayed delivery. These situations have to be fined, and some fines are even as high as one million yuan. The penalty is obviously too heavy. For manufacturing enterprises, there are many uncertainties in production, transportation and other aspects, resulting in unintentional breach of contract is inevitable, and it is unfair to bear excessive liability for breach of contract. Purchasing units deliberately or even deliberately punish, often resulting in wire and cable production enterprises cannot make ends meet, signed orders without profit, but losses.

Wire and cable production enterprises lack the right to speak, are passive everywhere, the payment method is unreasonable, the payment is difficult, the payment is slow, etc., which seriously squeezes the profit space of wire and cable production enterprises, coupled with the rise in raw material prices, resulting in wire and cable production Enterprises are struggling. Once the economic situation is bad, they will inevitably face the risk of bankruptcy.