The PP non-woven fabric industry is experiencing intensified "internal competition", and "high added value" is the way out
As a necessary material in the fields of infrastructure, automotive, medical, and industrial polishing, PP non-woven fabric has always been the "evergreen tree" in the textile new material track. Relying on the huge market demand and mature industrial chain, China's PP nonwoven fabric production capacity ranks first in the world, accounting for over 40%. But in the past two years, this seemingly prosperous track has completely fallen into a serious internal competition dilemma.
On one hand, leading industry giants continue to increase their investment and aggressively expand production, seizing market share; On the other hand, small and medium-sized manufacturers are clustered in the low-end track, with severe homogenization and fierce price wars, resulting in unlimited compression of profits, making it difficult to start production and profit. The industry has long bid farewell to the barbaric growth era of "expanding production and making money", and the problem of structural overcapacity has become prominent. Everyone is focusing on pricing and production capacity, but very few are deeply cultivating technology and high-end products. It has been proven that the era of simply competing for scale has come to an end, and only high value-added differentiation is the only way out for the PP non-woven fabric industry to break through.
The root cause of industry competition: the proliferation of low-end production capacity and severe supply-demand imbalance
Many people mistakenly believe that the PP non-woven fabric market is saturated, but in reality, the industry is not completely surplus, but a typical structural supply-demand imbalance. Data shows that the overall capacity utilization rate of PP non-woven fabrics in China has been at a low level for a long time, far below the industry's healthy red line of 80%. The overcapacity rate of low-end general-purpose products is as high as 33.3%, and the market has accumulated a large amount of homogeneous inventory. On the contrary, the production capacity gap of high-end functional PP non-woven fabric is 8.7%, and high-end products are in short supply for a long time, leading to increasingly obvious polarization in the industry.
The core trigger of industry competition is the continuous expansion layout of leading enterprises. In the context of industry stock competition, large enterprises rely on their advantages in capital, technology, and channels to continuously add spunbond, needle punching, and meltblown production lines, continuously expand production capacity and scale, with the intention of monopolizing the market and lowering industry average prices through volume advantages, squeezing the survival space of small and medium-sized manufacturers.
However, small and medium-sized manufacturers lack core technology and insufficient R&D investment, so they can only cluster in the extremely low threshold universal non-woven fabric track, focusing on popular products such as ordinary geotextiles, conventional cleaning cloths, and basic interior cloths. These types of products have simple processes, low barriers to entry, and no differentiation. In order to seize limited orders, small and medium-sized enterprises can only continuously lower prices to accept orders, ultimately falling into a vicious cycle of "price reduction → low profits → no funds for research and development → continued low-end competition".
Ice and Fire: Giants Eating Meat, Small and Medium sized Enterprises Struggling to Survive
Nowadays, the PP non-woven fabric industry has already presented a distinct "ice and fire dual sky" pattern, and the Matthew effect is becoming increasingly significant.
For top giants, the cost advantage and supply chain advantage brought by scale expansion are becoming increasingly prominent. Large enterprises can significantly dilute individual product costs through centralized procurement, automated production, and bulk shipments. At the same time, relying on brand qualifications, they can win high-end stable orders from infrastructure, automotive, and large sanitary material enterprises. Even if the overall industry prices decline, giants can still maintain stable profits and continue to increase market share by relying on their size and high-end products.
The survival situation of small and medium-sized enterprises is becoming increasingly difficult. On the one hand, the low-end market is flooded with production capacity and the price war is intensifying, with product prices infinitely close to the cost line. Any slight fluctuations in raw materials or equipment failures can lead to losses; On the other hand, the purchasing threshold for large customers continues to increase, and more and more end brands are prioritizing top enterprises with complete qualifications, stable production capacity, and controllable quality. Small and medium-sized manufacturers continue to lose high-quality orders, and can only compete for scattered small orders and low-priced final orders.
In addition, SMEs generally have the problems of old equipment, backward technology, and unstable quality control. The permeability, tensile strength, and anti-aging performance of their products are uneven, and they cannot adapt to high-end scenes such as new energy vehicle interiors, high-end medical protection, precision industrial polishing, and ecological slope protection. They can only be trapped in the low-end Red Sea track, and the living space continues to be compressed.
Say goodbye to low price competition! High added value is the ultimate way out for the industry
Overcapacity, price competition, and shrinking profits are the inevitable paths for all traditional manufacturing industries. For the PP non-woven fabric industry, continuing to blindly expand production and engage in price wars will only accelerate elimination, break out of low-end homogeneous competition, and deeply cultivate high value-added differentiated products, which is the core of the industry's breakthrough. At present, the premium advantage of high-end functional non-woven fabrics is very obvious, with high-tech products priced more than 40% higher than conventional products, and stable orders and lucrative profits.
Firstly, focus on functional modification and create differentiated products. Say goodbye to ordinary general cloth, make efforts to subdivide high-end track, and develop and produce anti-aging, high-strength, flame retardant, waterproof, antibacterial and corrosion resistant functional PP non-woven fabric. For example, lightweight soundproofing fabrics suitable for new energy vehicles, high standard medical antibacterial non-woven fabrics, high-strength roadbed geotextiles, precision polishing industrial scouring cloths, biodegradable and environmentally friendly non-woven fabrics, etc., avoid competition in the red ocean and seize the high-end segmented market.
Secondly, promote customized production and bind high-quality end customers. Top quality enterprises have long abandoned the "mass production" model and turned to "on-demand customization and precise matching". Through deep cooperation with automobile companies, sanitary material brands, and engineering enterprises, we jointly develop exclusive products that meet terminal needs, shorten the research and development cycle, improve product adaptability, and replace low-priced volume with customized services to break free from the constraints of price wars.
Thirdly, upgrade production processes to enhance product quality stability. By updating automated production lines, optimizing spunbond, needle punching, and composite processes, we can solve pain points such as uneven thickness, insufficient strength, and susceptibility to breakage of products, and improve product consistency and durability. Stable high quality is the core confidence for small and medium-sized enterprises to break out of low price competition and accumulate high-quality customers.
Fourthly, lay out a green and low-carbon track and keep up with industry trends. Under the guidance of the dual carbon policy, recycled PP non-woven fabric and biodegradable non-woven fabric have become new trends in the industry. Layout green and environmentally friendly products, adapting to the environmental procurement standards of municipal ecological engineering, new energy, and high-end household goods, can quickly build a new competitive advantage and seize the future incremental market.
Industry reshuffle accelerates, future success depends on 'technology' rather than 'scale'
It can be foreseen that in the next few years, the PP non-woven fabric industry will continue to undergo a deep reshuffle, and low-end outdated production capacity will gradually be eliminated by the market, leading to a continuous increase in industry concentration. The era of relying solely on production capacity and low price volume will come to a complete end. Technology, quality, differentiation, and added value will become the core standards for measuring a company's competitiveness.
The wave of giant expansion is both pressure and opportunity. For small and medium-sized enterprises, giving up blindly following the trend to expand production, jumping out of the low price internal competition quagmire, deepening the subdivision track, polishing high-end products, and building core advantages are the key to standing firm and achieving breakthroughs in the industry reshuffle.
The transformation trend of the PP non-woven fabric industry has arrived, from production capacity being king to technology being king, from scale expansion to quality upgrading. Only by embracing innovation and deeply cultivating high value-added fields can enterprises overcome the dilemma of internal competition and achieve long-term profitability and steady development in the fierce market competition.
Dongguan Liansheng Non woven Technology Co., Ltd. was established in May 2020. It is a large-scale non-woven fabric production enterprise integrating research and development, production, and sales. It can produce various colors of PP spunbond non-woven fabrics with a width of less than 3.2 meters from 9 grams to 300 grams.