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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 enterprises (SMEs) that had previously operated under state planning found themselves lost. These companies faced significant challenges, with some originally producing machine tools or agricultural equipment shifting their focus to food and packaging machinery. In addition, driven by market demand, private enterprises also saw potential in this sector and began exploring opportunities within it. Compared to the broader machinery industry, the food and packaging machinery industry was about 32 years behind, which means it is still in its infancy. Although it has experienced rapid growth, it suffers from several major shortcomings.
One of the key issues is low-level repetition. This is largely due to the diverse origins of companies—state-owned, collective, and private—each with different levels of capital, technology, and equipment. As a result, the starting points for development are uneven. Most companies operate with low-end equipment, leading to excessive duplication. For example, in one region alone, nearly 100 companies produce similar automatic sealing machines. The scale of these operations remains small, and there have been few significant changes over the past two decades. While cost reductions have come from specialized production, the high number of similar products in the same area has intensified price competition. A single machine can be sold for less than 1,000 yuan, leaving very slim profit margins. Some products, like small liquid fillers, have remained unchanged for over a decade. With so many manufacturers competing on price, some cut corners by using lower-quality materials, reducing durability and corrosion resistance. Others simply follow trends, imitating popular equipment without regard for intellectual property, causing confusion in the market. This low-level replication not only disrupts the market but also leads to technological stagnation and damage to the industry as a whole.
Another major problem is insufficient innovation capacity. As a relatively new industry, the proportion of research institutes and universities dedicated to food and packaging machinery is still small compared to the number of employees and companies in the sector. Many research institutions, after being restructured into commercial entities, now focus More on selling products than on conducting independent research. As a result, the application of new technologies is limited. Even when breakthroughs occur, they often fail to reach the market due to poor promotion and communication. Companies are forced to rely solely on internal R&D, which is inefficient and costly. The lack of collaboration between research, education, and industry has hindered progress. Cutting-edge technologies such as ultra-low temperature processing, high-pressure systems, membrane separation, supercritical extraction, radiation, and vacuum techniques are still dominated by a few institutions, and it's urgent for companies to invest in these areas. Without proper integration, many companies continue to copy each other, making only minor improvements to their products. These products may have a price advantage, but they struggle to compete internationally.
Lastly, the industry suffers from low production concentration. Food and packaging machinery is still an emerging sector, and despite 20 years of development, strong brand recognition is rare. However, companies that have focused on quality and continuous innovation, along with the adoption of advanced technologies, are gradually establishing themselves as leaders. For instance, while there are many manufacturers of beer and beverage filling lines, the top-performing products tend to be concentrated among a few well-known brands. There are nearly 6,000 companies in the industry, but over 2,000 are unstable. Each year, around 15% of companies close or change direction, while another 15% enter the market. Only a dozen companies have annual sales exceeding 1 billion yuan, and just one is listed. About 50 companies have annual sales above 30 million yuan, contributing a total of 8 billion yuan in revenue—accounting for 20.66% of the industry’s total. Over 75% of exports are handled by these companies, suggesting that large-scale industrial players will likely emerge from them. It is estimated that by 2005, 100 companies could reach 30 million yuan in annual sales, with production concentration surpassing 50%.