Abstract:The coal, petroleum and chemical industries pay more and more attention to safety production and production efficiency, and the demand for explosion-proof electrical products continues to grow. From 2017 to 2022, the market size of the mainland explosion-proof electrical appliance industry has been growing, reaching 9.35 billion yuan as of 2022, of which the market size of factory explosion-proof electrical appliances is 4.93 billion yuan, and the market size of mining explosion-proof electrical appliances is 4.42 billion yuan.
1. Definitions and Classification
Explosion-proof electrical appliances in a broad sense refer to electrical equipment that will not cause ignition in the surrounding explosive atmosphere under specified conditions. In oil fields, chemical industry, coal mines and other places, there are often all kinds of flammable and explosive gases, dust, steam and other media, which pose a potential threat to the safe operation of equipment and personnel and property. Therefore, in order to avoid explosion accidents or to limit the danger to a controllable range, all kinds of electrical equipment used in the above environment must be professionally designed to control and isolate potential sources such as high temperature and electric sparks in the surrounding environment. In order to distinguish it from ordinary household, commercial or industrial electrical equipment, the above-mentioned electrical equipment dedicated to flammable and explosive gases, dusts and other environments are generally referred to as "explosion-proof electrical appliances".
From the perspective of application scenarios, explosion-proof electrical appliances can be divided into two categories: one is mine explosion-proof electrical appliances, which are mainly used in coal mines, mines and other places where gas or other explosive gases exist, and the other is factory explosion-proof electrical appliances, which are mainly used in other places other than mines and coal mines, such as petrochemical, new energy/new materials, biomedicine, grain wine, underground pipe gallery, natural gas and other industry enterprises.
Second, industry policies
In January 2024, the State Council issued the Regulations on Work Safety in Coal Mines, proposing that the design, manufacture, installation, use, testing, maintenance, transformation and scrapping of safety equipment used by coal mining enterprises should comply with national or industry standards. The Regulations on Work Safety in Coal Mines will come into force on 1 May 2024. The support of national policies will greatly promote the investment in safety and technological transformation of the downstream industry of explosion-proof electrical appliances, thereby bringing about the growth of demand in the explosion-proof electrical industry.
Third, the development process
The explosion-proof electrical industry in mainland China started in the 50s of the 20th century, and has experienced more than 70 years of development, which is divided into three stages of development: 1) the start-up stage (1950-1960): In 1953, China's first explosion-proof electrical products were born, and the state began to implement explosion-proof electrical product certification standards and electrical equipment mine licensing standards for electrical equipment mines. 2) Initial development and self-research stage (1960-1978): In 1970, the only scientific research and inspection institution in the field of explosion-proof safety in China was established - Nanyang Explosion-proof Electrical Research Institute, and in 1977, the mainland published the first national standard for explosion-proof electrical equipment GB1336-1977 "Explosion-proof Electrical Product Manufacturing Test Specification", and the product was formalized. 3) Comprehensive development stage (1978 to present): In 2021, the new version of the explosion-proof standard was released, and China entered a new stage of explosion-proof development.
Fourth, industry barriers
1. Qualification certification barriers
Factory explosion-proof electrical appliances are of great significance to the safety production of downstream enterprises. In order to ensure the safety of personnel and property, the state adopts a strict market access management and product certification system for explosion-proof electrical enterprises. In 2019, the State Administration for Market Regulation included explosion-proof electrical appliances in the scope of CCC certification management: from October 1, 2020, explosion-proof electrical products that have not obtained the compulsory product certification certificate and have not been marked with the compulsory certification mark shall not be shipped, sold, imported or used in other business activities, which marks the further tightening of the country's supervision of explosion-proof electrical appliances. With the implementation of the new regulations, compulsory qualification certification has become one of the main barriers for enterprises to enter the explosion-proof electrical industry.
2. Product quality and brand barriers
Since explosion-proof electrical appliances play a vital role in the safety of personnel and property and the normal operation of production activities, in order to avoid the occurrence of safety accidents to the greatest extent, even if there is a certain difference in product price, downstream customers are more inclined to choose large suppliers with good product safety and quality records and brand reputation. On the one hand, the creation and formation of the brand needs to invest a lot of capital and labor costs, and the brand to obtain market recognition is inseparable from the long-term accumulation, the influence of new entrants in the industry is small, it is difficult to complete the brand establishment in a short time; on the other hand, customers have formed a certain consensus on the product quality and brand reputation of the existing major suppliers, and the loyalty is relatively high. Therefore, customers usually do not easily choose to switch to existing large suppliers, and product quality and brand effect form a high barrier for new enterprises to enter the explosion-proof electrical industry.
3. Customer service barriers
Explosion-proof electrical products are important electrical equipment to ensure the safe production of petrochemical, coal mine, natural gas and other fields, and customers are highly concerned about product quality, technical level, service ability, company brand, production scale, safety operation records, etc. Therefore, when choosing a supplier, customers will focus on suppliers with a long-term cooperation base. After years of operation, the main factory explosion-proof electrical appliance manufacturers have achieved market recognition and are deeply bound to core customers. New enterprises need to go through a long accumulation process in terms of operation records and service networks, and it is difficult to open sales channels and obtain high-quality customers in the short term. Therefore, customer service barriers have become a big obstacle for new enterprises to enter the field of explosion-proof electrical appliances.
4. Talent and technical barriers
Explosion-proof electrical products have a high degree of non-standard, and R&D personnel need to have rich industry experience. Most of the domestic colleges and universities have not yet opened explosion-proof electrical majors, so most of the technical talents in the industry rely on the training of enterprises themselves. In addition, with the downstream petrochemical, underground pipe gallery, fire security and other subdivisions of explosion-proof electrical appliances put forward more complex functional requirements, the explosion-proof electrical industry requires technical personnel to have optical, electronic, material, environmental, control and other multidisciplinary compound knowledge background. At present, the industry's outstanding talents are basically concentrated in the industry's leading enterprises, and it is difficult for new entrants to build a qualified talent team in a short period of time. Therefore, the talent and technical barriers in the explosion-proof electrical industry are high.
5. Barriers to capital and scale
The explosion-proof electrical appliance industry is a capital-intensive industry, which has high requirements for production conditions such as enterprise production, testing equipment, and plant floor space. First of all, the types and specifications of explosion-proof electrical products are diverse, the frequency of production conversion is high, and the related conversion investment is relatively large; secondly, the downstream customers of explosion-proof electrical products are mostly state-owned and large private enterprise groups in the petrochemical field, and these customers will put forward higher requirements for the scale and qualification of the bidder in the project bidding, which improves the access difficulty of small and medium-sized enterprises in the industry. In addition, although the probability of default of downstream large enterprise groups is low, it generally presents the characteristics of long capital settlement cycle and slow payment collection, resulting in a generally low capital turnover rate of explosion-proof electrical manufacturers, which also puts forward higher requirements for the financial strength of enterprises. Therefore, only enterprises with certain capital and scale strength can rely on their own advantages to achieve relatively stable and long-term development.
Fifth, the industrial chain
1. Analysis of the industry chain
There are a wide range of related products in the explosion-proof electrical industry, including all kinds of electrical equipment required in flammable and explosive dangerous environments, and a wide range of raw materials are required, relatively speaking, the main raw materials are aluminum products, steel products, light source parts, purchased electrical appliances, etc. Therefore, the upstream industries of the explosion-proof electrical industry are aluminum products industry, electronic components, lighting components industry, etc. In the long run, the supply, quality and price fluctuations of products in the upstream industry are relatively stable, and will not have a significant impact on the production and operation of enterprises in the explosion-proof electrical industry. The downstream of the explosion-proof electrical industry is mainly petroleum, chemical, coal mining, natural gas and other fields, and the demand changes of the downstream industries will have a greater impact on the explosion-proof electrical industry. In the long run, the above-mentioned industries still have a large space for development, laying the foundation for the long-term growth of the explosion-proof electrical industry.
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