At present, many enterprises begin to "cut off the supply" for the users who are difficult to collect the bad credit, low consumption and low price, which will undoubtedly form a fatal blow to the users who are small in the downstream of the coating industry.

Raw materials "skyrocketing" environmental supervision, enterprise costs rising

Since 2016, the price of domestic raw materials for coatings has continued to rise, bringing about the continuous increase in the cost of coating enterprises. According to China paint purchase network, the price of butadiene has increased by more than 200%, TDI by 400%; acrylic acid by 110%, titanium dioxide by 70%. With the continuous increase of raw material price, the operating cost of paint enterprises has been increasing, which has seriously reduced the profit space of paint enterprises.

In addition, since the implementation of the most stringent environmental protection law, domestic coating enterprises have been facing great environmental pressure. The environmental protection supervision is more than one round. Coating enterprises need to spend a lot of money to purchase environmental protection equipment, which further increases the operating cost of the enterprise. In conclusion, since then, coating enterprises have been forced to develop in a more refined direction. For example, Luoyang LecA powder coating Co., Ltd. strictly controls the cash flow, and selects and eliminates the small-scale and untimely paid users. On the one hand, it effectively controls the cash flow of the enterprise, on the other hand, it can control the trade risk.

Small and medium-sized coating enterprises may be liquidated at any time

In the whole coating industry, there are not many enterprises that actually install environmental protection equipment and meet the emission standards. Since the environmental protection supervision, there have been "countless" enterprises investigated and punished. For example, according to the results of the 2 + 26 inspection in Beijing, Tianjin and Hebei recently reported by the Ministry of environmental protection, more than 14200 enterprises have been inspected in the 2 + 26 cities of Beijing, Tianjin and Hebei, and more than 9700 enterprises with environmental problems have been found, accounting for nearly 69%. Among them, the number of "scattered pollution" enterprises is amazing. Tian Weiyong, director of the Environmental Supervision Bureau of the Ministry of environmental protection, said that through this enhanced supervision, we should check the "dead corner" of pollution and find out the bottom number. "Scattered pollution is still at the stage of local inventory, production suspension and rectification. If at that time this enterprise is still unable to complete the transformation and discharge up to the standard, it must be strictly banned in accordance with the enhanced air pollution control plan of Beijing, Tianjin and Hebei."

Most of the enterprises in the domestic coating industry are small and medium-sized enterprises, which have more or less the problem of "scattered pollution". Of course, there are similar problems in furniture, home appliances and other industries. In the face of such a severe environmental protection situation, these small and medium-sized enterprises meet at any time facing the danger of shutting down and sealing up.

For their upstream supplier coating enterprises, there is a great trade risk. This is also a lot of coating enterprises prefer to make less money, but also to recover funds first. Control the business risk of the enterprise to. It is not hard to understand why large paint companies are preparing IPO Financing recently, which shows that the cash flow of enterprises is not very abundant and the demand for capital is unprecedented.