Analysis of Business Model of Flame Retardant Industry
- time:
- 2019-05-13
Flame retardants, functional additives that give flame retardancy to flammable polymers, are mainly designed for flame retardants of polymer materials. There are many types of flame retardants, which can be divided into additive flame retardants and reactive flame retardants according to their use methods. Generally speaking, organic flame retardants have good affinity. In plastics, brominated flame retardants have the advantage of ** in organic flame retardant systems. Although they are widely criticized in environmental protection, they are hard to be replaced by other flame retardant systems. Flame retardant science and technology is developed to meet the needs of social safety production and life, prevent fire, and protect people's lives and property. Flame retardant is the application of flame retardant technology in real life. It is a special chemical additive used to improve the combustion performance of flammable and flammable materials. It is widely used in flame retardant processing of various decoration materials.
At present, the global flame retardant market is growing steadily, and the fastest growth in Asia. Although the history of flame retardants can be traced back to 1820 at the earliest, it was not until the 1960s that flame retardants were gradually produced and used in large quantities. After half a century of development, flame retardant has become the second largest plastic additive product after plasticizer, and the market consumption is very large. It is predicted that the global demand for flame retardants will grow at an average annual rate of about 5%. Global consumption of flame retardants in 2012 was about 197,000 tons. Global consumption of flame retardants is expected to reach 2.6 million tons by 2018. In terms of regional distribution, the United States, Europe, Japan and other parts of Asia (including China, India and Korea) are the four most important flame retardant consumer markets in the world. As the birthplace of flame retardants, the United States and Europe developed earlier.
The flame retardant industry in Asia started late and mainly adopted the following three business models:
1. Purchasing Model
The main raw materials include Propylene oxide, epichlorohydrin, phenol, bisphenol A, phosphorus oxychloride, polyether PPG and so on. These raw materials are purchased and managed through different strategies such as formula pricing and differentiated purchasing. When purchasing these raw materials, we mainly refer to the price of ICIS, the supply and demand of raw materials, the quotation of suppliers, and combine our own business experience to determine the timing of raw materials purchasing. Generally speaking, the mode of production and operation is to sell and fix production. Through the above purchasing management system, the fluctuation risk of raw material market can be controlled to avoid the risk of raw material cost change.
2. Production Model
The production mode is basically based on sales and production, that is, production is organized according to customer orders. In the middle of each month, according to the sales contract and sales budget provided by the sales department, the production plan for next month will be worked out. Verify the inventory of all kinds of products periodically every week, adjust the production plan rationally according to the sales plan and actual inventory, and compile the production plan sheet, report to the manager in charge of production for approval. After the plan is worked out, the factory directors and workshop directors organize production. At the same time, maintenance personnel and safety personnel conduct daily inspection of machine equipment and worker production, and establish daily equipment account, safety account and workshop site management account. According to the product technical standards formulated by the technical department, the quality department completely inspects every batch of products produced in the workshop, and then re-inspects the products when they leave the factory. From the production instructions to product warehousing, the cycle is about half a month.
3. Sales Model
From the point of view of sales mode, direct selling is the main method and distribution is the supplement. In view of the domestic market, especially in the areas where the distribution of terminal customers is relatively concentrated, direct marketing is mainly adopted. For areas with small market size, they are basically sold through distributors. In terms of export, direct sales are adopted for major customers such as Bayer Material Science and Technology, Shaber Basic Innovative Materials, Basf, Danmilak, etc. For Europe and America where the flame retardant market is relatively mature, besides direct sales for major customers, distributors are also used to serve local small and medium-sized customers.
