1. Favorable factors

a. Strong support from national policies

The manufacturing industry is a pillar industry of China's national economy, and the mold industry and plastic products industry, as important supporting industries for modern precision manufacturing, have always been valued by the country for their development. In recent years, the central and local governments have successively issued a series of industrial policies and medium - to long-term development plans to support the growth and strength of the mold industry and plastic products industry.

In recent years, a series of relevant policies and regulations issued by the government have continuously standardized and guided the mold and plastic product industry to move towards high-end development. The "High end Intelligent Remanufacturing Action Plan (2018-2020)" policy has promoted the development of large-scale manufacturing enterprises in China towards meeting the needs of more refined components; The Investment Guidelines for Technological Transformation and Upgrading of Industrial Enterprises (2019 Edition) and the Guiding Catalogue for Industrial Structure Adjustment (2019 Edition) explicitly encourage enterprises to invest in the design and manufacturing of precision molds for non-metallic products. The Guiding Opinions on Technological Innovation in the Plastic Processing Industry during the 14th Five Year Plan period state that functionalization, lightweighting, precision, ecology, and intelligence are the directions for technological innovation and development in the plastic processing industry; The injection molding of micro nano and high-precision products such as medical, electronic, household appliances, and transportation, as well as the injection molding of complex shaped plastic wood parts, has been listed as a key product development direction during the 14th Five Year Plan period.

b. Continuous technological progress in the industry

After years of independent accumulation, introduction, absorption, and innovation, China's mold industry has accumulated a certain technological foundation. At present, there is a significant increase in precision, large, and composite mold products in the industry, and the main indicators of some leading enterprise products have reached the international first-class level. Backbone enterprises in the mold industry have gradually implemented advanced technologies and processes such as high-speed machining, parallel engineering, reverse engineering, virtual manufacturing, imageless production, and standardized production, which have established a good demonstration effect for the development of the industry.

c. The focus of international host and supporting industries continues to shift to China

The development of the mold industry is closely related to its downstream industries. In recent years, the trend of industrial transfer, supply chain globalization, and the rapid development of downstream industries such as domestic automobiles and electronic products have provided a favorable external environment for the development of the mold industry, one of the basic industries in the manufacturing industry. For domestic mold enterprises, on the one hand, it is a good opportunity to enter the international market and become a global mold supplier, which can obtain more market opportunities; On the other hand, the shift of the global mold industry's focus to China is beneficial for Chinese enterprises to digest and absorb advanced technologies and products from abroad, thereby narrowing the gap with advanced levels.

d. Market demand expansion

With the increasing national income, consumer demand for products is gradually expanding in terms of variety and quantity, and the demand for quality is gradually increasing. The strong demand in industries such as household appliances, daily necessities, and electronic consumer goods provides conditions for the production capacity digestion of related manufacturing industries.

2. Adverse factors for industry development

a. The scale of enterprises is generally not large

The universality of mold products is low, and the characteristics of specialization and differentiation are very obvious, resulting in a relatively small average scale of mold enterprises in China. They are at a disadvantage in dealing with fluctuations in raw material prices, customer changes, and participating in international market competition. In order for China's mold industry to grow and strengthen, it is not only necessary to make breakthroughs in the development of mid to high end molds and replace imported products, but also to require small and medium-sized mold enterprises to focus on mold development, provide customers with supporting services such as injection molding product processing, and achieve diversified income sources and large-scale operation of enterprises.

b. The level of cutting-edge technology lags behind overseas, and high-end production equipment relies on imports

The mold industry in China has made significant progress in product accuracy, lifespan, and complexity, but there is a significant gap between the high-end technology and comprehensive research and development production level of enterprises and advanced overseas enterprises, which has a certain impact on the precision, production efficiency, and profitability of injection molded products. Moreover, the development level of domestic plastic product enterprises is uneven. Analysis of Singapore injection molding companies shows a lack of large advanced enterprises, with small and medium-sized enterprises being the majority. The overall product technology level is at a medium to low level, and there is a certain gap with the advanced level of foreign countries.

Mold is the foundation of all injection molded products. The quality, accuracy, service life of molds, as well as the precision and production efficiency of injection molded products, require high production equipment. Without high-end advanced equipment, high-precision molds and high-quality injection molded products cannot be produced. After years of technological transformation, the mechanical processing industry in China has greatly improved its process and equipment technology. The domestic tool industry, such as machine tools, can provide processing equipment with certain accuracy. However, high-end equipment with high precision, stability, reliability, and high efficiency still needs to be imported from abroad.

c. The industrial chain is not perfect enough

The coordinated development of various links in the industry chain centered on molds in our country is insufficient, especially with the significant lag in the development of mold materials. Mold materials have a significant impact on the quality of molds. For a long time, domestic mold materials have not been able to meet the needs of the industry in terms of variety, quality, and quantity. The materials for high-end molds and export molds almost all rely on imports. In addition, various equipment upstream of the mold (such as machine tools, cutting tools, testing, heat treatment equipment, etc.) and production methods (software, auxiliary materials, consumables, etc.), as well as forming materials (various plastics, rubber, plates, mold steel and non-metallic and composite materials, etc.) and forming equipment (rubber and plastic forming equipment, stamping equipment, casting and forging equipment, etc.) heavily rely on imports, limiting the rapid development of the mold industry.

d. Weak financing ability of enterprises

At present, the industry is mainly dominated by small and medium-sized enterprises, and the limitations in scale, credit rating, and other aspects determine that the available financial support is very limited. Although financial institutions have formulated loan policies for small and medium-sized enterprises, the problems of difficult loans and financing are difficult to fundamentally solve, becoming another bottleneck for the rapid development of small and medium-sized enterprises in the industry.

3. Industry entry barriers

a. Technical and experiential barriers

Technical level and professional production experience are the core competitiveness of the industry. From the design and development of precision injection molds, scientific trial molding to injection molding, component assembly, and surface treatment, precise coordination and connection between processes are necessary. Therefore, enterprises need to have strong capabilities in mold design and development, injection molding technology, as well as a high level of quality control and production management. This not only requires enterprises to invest in long-term technological research and development, but also to accumulate valuable production, manufacturing, and management experience through long-term practice. In recent years, the updating and replacement speed of downstream products in the plastic product industry has been increasing. Plastic product enterprises need to strictly design and develop corresponding molds according to the time requirements of downstream customers, and have the ability to efficiently and large-scale injection molding. Developing molds that meet various requirements such as appearance, accuracy, quality, and service life in a short period of time and delivering a large number of injection molded parts in a short period of time puts high demands on the research and development design ability, mold manufacturing ability, and batch forming manufacturing ability of enterprises. In addition, the high requirements of downstream customers for products have also prompted plastic product enterprises to continuously introduce new processes and technologies, continuously improve automation levels, and optimize product structures. It is difficult for newly entered enterprises to break through the limitations of the aforementioned technological and experiential barriers in a short period of time.

b. Qualification barriers to entering the supply chain of well-known enterprises

Molds and injection molded products are the fundamental components of downstream products, and stable product quality, accurate specifications and dimensions, and timely delivery time are of great significance for completing complete end products. To become a supplier to a globally renowned enterprise, in addition to meeting industry standards for Singapore injection molding companies, it is also necessary to undergo strict qualification review by customers for suppliers. Usually, the identification of suppliers takes a long time. Downstream customers conduct comprehensive assessments of the supplier's technical level, production conditions, production equipment, quality control, financial situation, corporate reputation, and other aspects. Strict requirements are put forward in each production link, and preliminary qualification identification can only be obtained after layers of review and inspection. Moreover, it is necessary to achieve stable quality through multiple batches of small quantity supply in order to officially enter the supplier directory. Once a company obtains the supplier qualification of a world-class enterprise, it will be included in its global supply chain system and can receive its purchase orders. Therefore, strict supplier qualification recognition has formed a qualification barrier for entering the supply chain of globally renowned enterprises.

c. Financial barriers

The plastic products industry is a capital intensive industry. The manufacturing cycle of precision injection molds is long and of high value, requiring the use of high-quality raw materials such as mold steel, mold frames, and mold accessories. From purchasing raw materials to delivering products, a large amount of working capital is required; The scale and production of injection molded products are relatively large, and the quantity of raw material procurement is also large, leading to an increase in the demand for working capital; To maintain market competitiveness and quality stability, enterprises need to invest a large amount of funds in factory construction, procurement of production equipment and R&D instruments, technical research and development, introduction of professional technical personnel and management teams, and other aspects. The above multiple factors have caused high capital barriers in the industry where the enterprise operates.

d. Barrier to scale production capacity

The plastic products industry has high requirements for equipment investment and strict requirements for production processes and product quality. Injection molded products for consumer electronics and automotive parts require high timeliness and production capacity from manufacturers to meet their large-scale order demands. Only enterprises that have reached a certain production scale can obtain orders. Therefore, only enterprises with sufficient equipment scale and a certain number of workshops, technical talents, and skilled worker reserves can provide sufficient production capacity and enter higher-level competition.

e. Brand barriers

Brand integration reflects a company's research and development design, product quality, operational management, and after-sales service level. The establishment and formation of a well-known brand require a large amount of investment, as well as long-term word-of-mouth accumulation and reliability verification. As the foundation of precision manufacturing, molds are directly related to the production quality and product performance of related plastic products. As plastic products are produced in large quantities on the basis of molds, once the molds have problems, it will lead to a large number of defective products, directly affecting the production and product quality of downstream manufacturers, causing huge losses. Therefore, the reputation and brand of mold enterprises are very important. Having a high brand guarantee is an important factor for customer groups to choose their supply chain enterprises. Famous customers in industries such as automobiles and electronics tend to maintain long-term cooperative relationships with suppliers with high brand awareness. The era of brand competition in the precision injection mold industry has also created high barriers for new entrants.