In order to ensure the sustainable and stable development of the national economy and solve the problem of power shortages, the state timely revised the 10th Five-Year Plan for the power sector. Together with the 13 new power plant construction projects approved by the State Council for a total investment of 51.2 billion yuan, the annual demand for the transformer industry is expected to be 360 million to 400 million kVA. Driven by relevant national policies, a new round of power investment boom has arrived. It can be seen that in the next few years, manufacturers of transmission and transformation equipment will be at full capacity, showing a booming production and sales situation.
It is understood that there were only more than 100 transformer companies nationwide before 1995, and by the end of 2003 the industry had grown to more than 1,000. In recent years, some large domestic transformer companies have introduced multi-faceted technology and extensively recruited high-tech talents to improve the technical level and grade of their products, speed up the pace of technological innovation, expand their scale, and speed up their development; there are also some companies with certain technologies and Manufacturing strength has a high market share in some regions, but the overall market share is not large; many private enterprises have formed a certain market share due to the flexible operation mechanism of the enterprise and no non-productive burdens.
The entry threshold is too low, competition is becoming increasingly fierce, manufacturers are rushing to reduce prices, rectifier transformer production capacity is already excessive, and most enterprises are making small profits or even losing money. The entire industry is facing a situation of "regrouping of forces, redividing the market, and redistributing benefits."
In the past two years, there have been too many companies joining the transformer industry. In order to compete for the market, the companies have competed with each other and fought a price war. As a result, the original profit rate of 30% to 40% in previous years has fallen to the current 5%. The prices of raw materials such as copper wires continued to rise, and the transformer industry did not sit back and relax because the market was better. Judging from the cooperation and joint ventures between some domestic enterprises and foreign groups, the integration of rectifier transformers has begun. With the intensified competition among manufacturers, only 20 to 30 companies will occupy most of the market in the future. This market redistribution trend has become more and more obvious, and the redistribution of benefits will follow.