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There are three major problems in the domestic food and packaging machinery industry
China's food and packaging machinery industry emerged in a market economy. When China transitioned into a market-driven system in the early 1980s, many small and medium-sized enterprises (SMEs) that had previously operated under state planning found themselves uncertain about their direction. These companies faced significant challenges. Some factories that originally produced machine tools or agricultural equipment shifted their focus to food and packaging machinery, beginning to develop and manufacture such products. Additionally, due to growing market demand, some private enterprises also saw potential in this field and began exploring opportunities in food and packaging machinery. Compared to other sectors of China’s machinery industry, the food and packaging machinery sector was approximately 32 years behind, making it a relatively immature industry. Although it has experienced rapid growth, it still suffers from several serious issues.
One major problem is the low level of technological repetition. This stems from the diverse origins of companies—state-owned, collectively owned, and private—which leads to varying levels of capital, equipment, and technical capabilities. As a result, the starting points for development are uneven. Most companies operate with low-level equipment, leading to over-saturation in certain markets. For example, in one region, nearly 100 companies produce similar automatic sealing machines. The scale of these operations remains small, with little change over the past two decades. While cost reductions have been achieved through specialized production, the high volume of repeated manufacturing in the same area has intensified price competition. A machine that costs More than 1,000 yuan can be sold at a very low margin. Some products, like small liquid filling machines, have remained unchanged for over a decade. With so many manufacturers in the market, low-cost competition has led to compromised quality, such as using inferior materials and cutting corners, which reduces durability and corrosion resistance. Some companies simply follow others, copying popular equipment without regard for intellectual property, leading to confusion in the market. This low-level repetition causes market disorder, technological stagnation, and even self-destruction within the industry.
Another challenge is insufficient innovation capacity. As a relatively new industry, the number of research institutions and universities involved in this sector is still limited compared to the total number of employees and companies. Many research institutes, after being restructured into commercial entities, focus on selling products rather than conducting independent research. This results in a gap between scientific achievements and practical application. Even when new technologies are developed, they often fail to reach the market due to poor promotion and communication. Companies are forced to rely solely on internal R&D, which limits progress. The traditional model of combining production, education, and research has not been effectively implemented, and limited scientific efforts have not fully contributed to the industry. As a result, many companies engage in imitation, producing slightly improved versions of existing products. Without innovation, these products lack competitiveness in the global market. It is hoped that research institutes and universities will leverage their resources, use industry associations as a bridge, and introduce practical technologies with strong economic and social benefits.
Lastly, there is a low level of production concentration. Despite being an emerging industry, the food and packaging machinery sector has not yet built strong brand recognition. However, companies that prioritize quality and continuously innovate, adopt advanced technologies, and explore cutting-edge solutions are gradually establishing themselves as leaders. For instance, although there are many manufacturers of beer and beverage filling lines, well-known brands with high sales have become more concentrated. There are nearly 6,000 companies in the industry, but only about 2,000 are stable. Around 15% of companies close down or change industries each year, while another 15% enter the market. Among them, only a few companies achieve sales exceeding 100 million yuan. One company reached over one billion yuan in sales, and there is only one listed company. Only 50 companies have annual sales over 30 million yuan, with their combined sales totaling just 8 billion yuan, accounting for 20.66% of the market. Seventy-five percent of exports are handled by these top firms. By 2005, it is expected that 100 companies will have annual sales over 30 million yuan, and the industry's production concentration could exceed 50%. This trend indicates a move toward consolidation and stronger market presence.