From August 16th to 18th, 2022, the 9th China Aggregates Industry Technology Conference was held in Wuhan, Hubei. The reporter of China Building Materials Daily interviewed Hu Youyi, president of China Aggregates Association during the conference, on the current status and future development direction of the Chinese aggregates industry.

The article is as follows:

CAA president, Hu Youyi

From extensive model to high-end model, a new industrial ecology needs to be built for the aggregates industry 

"China's  aggregates and equipment industry is in transformation from the traditional extensive development mode to a high-end industry with a longer industrial chain, higher added value and a large scale. For enterprise managers, strategic thinking and grasping capability is becoming more and more important." Recently, at the 9th China Aggregates Industry Technology Conference, Hu Youyi, President of China Aggregates Association, pointed out that as the current major changes unseen in a century interlacing with the Covid-19 pandemic, the risks and downward pressure faced by the global economy has increased significantly. In this case, the high-quality and sustainable development of the aggregates industry urgently needs to build an industrial ecology.

Opportunities and challenges coexist

Aggregate is the largest consumed, irreplaceable and indispensable material for infrastructure construction such as buildings, roads, bridges, water conservancy and hydropower. In recent years, through the support of governments at all levels and the joint efforts of colleagues in aggregates enterprises, the industry has achieved considerable development. Manufacturing environment of the machine-made aggregates has drastic change, and the green, digital and intelligent quarrying has achieved remarkable results.

The reason is that the unremitting efforts of the industry and opportunities are the keys to boosting the development of the industry.

Since the 13th Five-Year Plan started, significant progress has been made in new-type urbanization, and the level and quality of urbanization have been greatly improved. During the "14th Five-Year Plan" period, China's urbanization developed rapidly, and the driving force of urbanization is still strong. By 2025, the urbanization rate of the resident population across the country will steadily increase. In addition, since the "13th Five-Year Plan", China's highway construction investment has accounted for about 2.4% of GDP, which has played a significant role in stabilizing investment and growth. Roughly calculated, there are still about 28,000 kilometers of roads to be built in national expressways, another 30,000 kilometers of busy roads need to be expanded and reconstructed, and about 110,000 kilometers of ordinary national highways need to be constructed and reconstructed, which will continue to play a role in stimulating effective investment, and is also the future target market of our enterprises. In addition, the development plan of the Guangdong-Hong Kong-Macao Greater Bay Area, the Beijing-Tianjin-Hebei integrated development plan, and the new western land-sea corridor have provided market space for the development of the aggregates industry.

Green aggregates production line at Taisheng Stone Field Co. LTD in Jiangmen City, Xinhui District

However, challenges coexist with opportunities. In this regard, Hu Youyi pointed out that under the background of the continuous Covid-19 epidemic in the past three years, the aggregates industry, which has developed rapidly for the past seven or eight years, has been affected by factors such as insufficient newly started infrastructure projects, reduced investment in real estate development, and excessive allocation of regional mining rights. The result is that in some areas, the overcapacity of aggregates has already appeared, the price of aggregates dropped. The future development of the industry is full of challenges, and the competition of enterprises has intensified, which should be highly regarded. On top of that, a number of large-scale mining rights have been approved along the Yangtze River, and central enterprises, state-owned enterprises, and large private enterprises have invested heavily in the construction of a number of large-scale and super-large machine-made aggregates production lines, which has played a good role in leading and demonstrating the transformation and upgrading of the national aggregates industry and the development of large-scale and greening of quarries. However, in the next few years, as new production lines along the Yangtze River to be completed and put into operation one after another, the supply of aggregates in this area will increase sharply, which will lead to overcapacity. The competition in the aggregate market will intensify in the near future.

"In the future, areas without quarries are likely to have a tight supply of aggregates, areas with quarries but low demand will balance supply and demand, and areas with more approved mining rights will have excess capacity." Hu Youyi predicted.

Urgent need to build a new industrial ecology

Green aggregates dock at China Power Construction Anhui Changjiu Advanced Material Co., LTD

The machine-made aggregates industry integrates mining, processing and transportation. It is a large-scale, wide-ranging, multi-influencing, cross-disciplinary, and long-chain industry. Machine-made aggregates are a large-scale industrial products. Hu Youyi believes that the ecology of the industry has a great impact on the high-quality and healthy development of the industries and enterprises.

"A good ecology of the aggregates industry is as important to an enterprise as clothing, food, sunlight, air, etc. are for the survival of human beings. If an industry does not have a good ecology, the development of the industry and the long-term survival of the enterprise will encounter problems. It's a big problem." Hu Youyi pointed out that the current ecology of the industry is still very imperfect, and if it stays at the current level for a long time, it will hinder the safe, healthy and high-quality development of the industry. Therefore, four aspects of the aggregates industry should be considered. One is the scientific level. Machine-made aggregates is a large-scale industrialized product and a cross-disciplinary, and long-chain industry. The second is the philosophical level. The aggregates are heavy in weight, low in value and small in absolute value of profit. Only by understanding it can the profit be made by the theory of "quantitative change to qualitative change". The third is the cultural level. Aggregates are regional products. Different regions have different cultures and different operating methods. The fourth is ideology. Different people have different perceptions of aggregates, which determines whether to support the development of the industry or not.

"Industrial ecosystem has a good ecological hierarchy, which enables the most economical interaction of logistics, people flow, capital flow, and information flow in the ecosystem, and provides strong market competitiveness for enterprises in the circle. Industrial ecosystem mainly includes six dimensions, which are, production, technology, service, labor, related infrastructure, public or government." Hu Youyi emphasized that machine-made aggregates industry cannot be regarded as simple mining, aggregates processing and transportation, but should be regarded as an emerging raw material industry with large volume, long chain and wide coverage. Aggregates products are closely related to human survival and social and economic development.” It is necessary to deeply understand the essential properties of the aggregates, and at the same time to extend the industrial chain, in order to exert its huge potential.

In the current environment, Hu Youyi called on colleagues in the industry to shoulder the responsibility of stabilizing the economy, promoting growth, safeguarding people's livelihood, efficiently serving the country's infrastructure construction, strengthening scientific and technological innovation, strengthening cooperation and collaboration, and using new ideas to build the ecology of the aggregates industry.

Innovation must be integrated into the development of the aggregates industry

"Innovation is the soul of the survival and development of an industry and enterprise. In order to inherit and develop, innovation is particularly important under the new situation." Hu Youyi said that with the rapid development of science and technology, the competition between industries and enterprises has become competition for innovation in the field of science and technology.

For the aggregates industry, sand and gravel and equipment companies used to only extract sand and quarry and manufacture equipment, without looking at the situation. Under the current situation, the main measures to stimulate the economy are to expand investment and accelerate the construction of major projects, which is good for aggregates-producing and equipment companies. However, the competition of enterprises in the future will be all-round. In addition to the original elements, it also involves public opinion, communication technology, finance, trade, energy and supply chains. Under such circumstances, enterprises must constantly adjust their development strategies in order to survive and develop in the future.

At present, the annual production and sales of aggregates in China has reached almost 20 billion tons, and the annual output value has reached more than 2 trillion yuan. The industry has entered the fast lane of high-quality development, and continuous technological innovation is needed more than ever to ensure the safety of the industrial development.

"In June 2018, the aggregates industry were included in the catalog of emerging strategic industries; in November 2018, the aggregates industry rose to one of the nine major mining industries in China; in November 2019, the guideline for high-quality development of the aggregates was listed by 10 national departments; in March 2020, 15 national departments issued a guideline for healthy and orderly development of the aggregates industry... Then the relevant documents on aggregates in various provinces were released. The aggregates industry is highly valued by the government and has a huge volume, but due to historical reasons, colleges and universities have not established corresponding majors. There is also no special research and development and inspection and testing institutions, and the relevant systems are very imperfect, which is far from a complete and sound industrial system. This requires the joint efforts of the entire industry, and the establishment of market-oriented research and design institutes, the R&D center, so as to systematically establish a scientific and technological system for the industry from the source of stone materials, to the design and layout of equipment and process flow, to the practical application of machine-made aggregates products, etc., on the basis of systematic research. Only by this can we ensure the green, low-carbon, safe and high-quality development of the aggregates industry.” Hu Youyi said.