MSG industry integration into the era of competition 2.0

It is undeniable that the MSG industry is now facing the most difficult period in more than a decade. Different from previous industry integrations, especially after the industrial wars in 2006-2008, the pattern of the MSG industry has undergone profound changes, and the degree of industry concentration has been continuously improved. The first legions represented by Yifeng Group and Meihua Group gradually formed. . Undoubtedly, under this industry pattern, the spread of this war will surely be more complicated than in the previous period, and the game is already developing in depth.

According to relevant department statistics, as of the end of 2012, there were only about 10 companies that used corn as raw materials and implemented full-scale production, and the market has clearly moved closer to the leading enterprises such as Fufeng, Meihua and Yipin, and the industry concentration has been significantly improved. The monosodium glutamate manufacturers south of the Yangtze River were basically wiped out in the battle between 2006 and 2008. There was no chance to support this fully-upgraded battle. Even if there are only a few remaining manufacturers, they still rely on large-scale procurement packages. To keep running. The traditional strong enterprises in Shandong are also experiencing increasing pressure due to changes in the supply and demand situation of raw materials. In fact, this situation is exactly the inevitable result of market competition. Before this, more than 200 monosodium glutamate manufacturers in the country had very low industrial concentration, and their bargaining power was particularly weak, which restricted the development of advantageous production capacity and was not conducive to the development of the entire industry. The relative excess production capacity and chaotic market competition were disorderly and positive. This is a concentrated expression of these issues. In fact, before the country announced the elimination of backward production capacity in recent years, these production capacity has already been sentenced to death by the market.

As we all know, the glutamic acid monosodium glutamate industry is a mature manufacturing industry with low technical barriers and large capital investment. Similar to other mature manufacturing industries, competition is often dominated by direct price wars. From the point of view of the manufacturing sector itself, it is the first level of competition in the industry that seeks to minimize the overall cost. It should be noted that through the 2006-2008 campaign, the industry concentration of the MSG industry has increased significantly, and leading enterprise groups such as Fufeng and Meihua have gradually begun to exhibit giant poses. However, the chaotic and disorderly situation has not been fundamentally changed. Competition in the industry is still in its infancy. This situation has existed for a long time and will inevitably have a profound impact on manufacturers, and will affect the development process of the entire industry.

In fact, this situation did not last long. The price of MSG has been rising from the lowest point of 6,400 yuan/ton since 2009, and has soared all the way to the extreme at the end of 2009, reaching a maximum of 13,000 yuan/ton. The outstanding performance of the market has temporarily overshadowed the industry's lack of periodicity. The first group of the industry has accelerated the country's industrial layout, enjoying the peak of profit after integration, while carrying out internal digestion accompanied by the expansion of scale, and at the same time, it is the next round of battles. The fire started well. Other surviving manufacturers have also started to build up their horsepower. Their movements also constitute the premise of the next round of battles. The industry has accumulated energy in a calm appearance.

The smoke has not yet dispersed and the war is approaching again.

In mid-2011, new production capacity for Fufeng, Meihua and Yipin was gradually put in place, and COFCO entered the field of MSG. Production capacity began to be released. The new round of price turmoil began immediately, and the market for MSG went all the way. By the end of May this year, the prices of major monosodium glutamate manufacturers had fallen below 7,000 yuan/ton.

The game dominated by a leading company is much more complex than the battle of the last round. On the one hand, different companies have different stages of development, production capacity, and delivery schedules; on the other hand, large companies often maintain a delicate balance between them. The industry structure has undergone profound changes. The emergence of leading enterprises has led to deeper follow-up games and the era of comprehensive competition has arrived. If the front competition is the competition in the manufacturing process, the latter competition will be the competition of the comprehensive strength of the company. Cakes will only grow bigger and bigger. Looking from the present stage, the industry will be further concentrated. Compared with other enterprises, the first group represented by Yifeng and Meihua has already taken the initiative and initiative with a sound industrial layout and a complete industrial chain. The post-competition era is accompanied by the awakening of the manufacturers' industry self-discipline and is expected to be quite long. For some time in a relatively balanced environment, the MSG industry is expected to enter the 2.0 era of relatively stable cooperation and competition. At present, the news is known that the market has gradually stabilized and prices are gradually picking up, and some markets have already offered 7,600 yuan/ton.

It should be pointed out that due to the link with the daily consumption of the general public, the monosodium glutamate industry shows a clear demand stability and rapid recovery. Through the comparison of industry economic indicators, we can find that the MSG industry is stable in the economic fluctuations, and is affected by the economic environment. It is one of the sub-industries with the most outstanding performance in the food industry sub-sector. More competition with the concept of second-generation and third-generation condiments will not cause the decline of the MSG industry. It is estimated that the capacity of the fresh condiment market in mainland China exceeds 30 billion yuan, accounting for nearly 25% of the total capacity of the condiment industry. Among these, the direct market capacity of traditional fresh condiments represented by monosodium glutamate accounts for more than 70%. . It can be said that MSG is still one of the most important varieties in the fresh condiment market in mainland China. According to the structure of MSG demand at this stage, the food processing industry consumes about 50% of the supply of monosodium glutamate, the catering industry consumes 30%, and the household consumption is about 20%. The growth of these three channels will also become the driving force for the development of the condiment market. We have reason to believe that with the acceleration of China’s economic development and urbanization, the MSG industry with higher industrial concentration, more orderly competition, and relatively balanced production and sales will usher in new opportunities for growth.