According to incomplete statistics, from the end of last year to the beginning of this year, about 20 e-cigarette enterprises have moved to Southeast Asia, and there are many leading enterprises.
At the end of last year, shortly after the new plant built in Songshan Lake, Dongguan was put into use, Wang Jing was already considering whether to move to overseas production.
Wang Jing is the chairman of melster (Guangdong) Biotechnology Co., Ltd. the company has invested in a new e-cigarette production plant with an area of more than 16000 square meters, creating a GMP standardized solid particle consumable rod production workshop.
On November 26 last year, the State Council decided to amend the regulations for the implementation of the tobacco monopoly law and add "electronic cigarettes and other new tobacco products shall be implemented with reference to the relevant provisions of these Regulations" as Article 65. On December 2, the State Tobacco Monopoly Administration issued the measures for the administration of electronic cigarettes (Draft for comments).
E-cigarette has been given the identity of a new type of tobacco, which also means that the industry no longer grows savagely and has entered the era of comprehensive supervision. However, the details of e-cigarette supervision are unknown, and the industry is still groping. The main reason for Wang Jianyan's not knowing whether he will do a good job in the export industry after many years of relocation is that he has not found out whether he will do a good job in the export industry.
On March 11, the State Tobacco Monopoly Administration officially issued the measures for the administration of e-cigarettes and the national standard for e-cigarettes (second draft for comments), but the contents of the two documents did not mention the tax issue of e-cigarettes, and the detailed rules on export, production license and other aspects still need to be implemented.
Liu Qi, a practitioner in the e-cigarette industry, told first finance that in fact, the main idea of moving out is the e-cigarette manufacturer. According to the current policy, manufacturers need to declare in advance to introduce new equipment or develop new technologies for Capacity Upgrading in the future. The manufacturer itself brings profits by relying on capacity and technological upgrading. If the key two points cannot be controlled, the enterprise has certain risks.
According to the 2021 e-cigarette industry blue book, there are more than 1500 e-cigarette manufacturing and brand enterprises in China, including 200 brand enterprises and 743 Enterprises above Designated Size (annual sales of more than 20 million yuan). In addition, there are nearly 100000 e-cigarette supply chain and peripheral service enterprises.
According to incomplete statistics, about 20 e-cigarette enterprises have moved to Southeast Asia from the end of last year to the beginning of this year.
industry ushers in the era of strong supervision
In 2019, the state tobacco administration and the State Administration of Market Supervision issued the notice on further protecting minors from e-cigarettes, which determined to ban the online sales channels of e-cigarettes. Strict supervision of online sales channels of e-cigarettes also means that the era of "barbaric" development of e-cigarettes has entered an inflection point.
In July 2020, the state again issued the action plan for special inspection of e-cigarette market to comprehensively clean up the illegal sales of e-cigarettes and standardize the business behavior of the industry.
On November 26 last year, the State Council decided to amend the regulations for the implementation of the tobacco monopoly law and add the article that "electronic cigarettes and other new tobacco products shall be implemented with reference to the relevant provisions of these Regulations".
On March 11, the measures for the administration of e-cigarettes once again emphasized the identity of e-cigarettes as "new tobacco products". Together with the administrative measures, the national standard of electronic cigarette (second exposure draft) has been issued. Both of them have made more detailed constraints on the production and sales of electronic cigarette, but the tax issue has not been mentioned. The specific implementation standards of relevant measures need to be further confirmed.
Ao Weinuo, Secretary General of the e-cigarette Industry Committee of China Electronic Chamber of Commerce, said in an interview with China first finance on the day of the introduction of the policy that the introduction of the management measures is conducive to industry norms and the healthy and effective development of the e-cigarette industry. On the one hand, it has established that the regulatory subject is the state tobacco monopoly administration, and at the same time, it has also determined that the product attribute is new-type tobacco.
In recent years, a series of regulatory measures for e-cigarette industry have been issued, which, on the one hand, makes this emerging industry develop in a more standardized direction; On the other hand, the uncertainty brought by the policy also makes some enterprises confused about the future development.
electronic cigarette "Flying Southeast"
Shenzhen brings together nearly 90% of China's e-cigarette enterprises, and the e-cigarette production plants in Shenzhen are mainly concentrated in the Shajing area of Bao'an District. In recent years, due to the rising labor prices and factory rents in Shenzhen, some factories have also transferred to the surrounding city of Dongguan.
However, after more than ten years of accumulation, a complete e-cigarette industry chain operation has been formed in Shenzhen and Dongguan, where the five main links of raw materials, manufacturing, brand, wholesale and retail form a closed loop. According to the 2021 blue book on e-cigarette industry, the e-cigarette industry drives 1.5 million direct employees and 4 million indirect employees.
The industry is expanding, but due to the controversial nature of e-cigarettes, it has also been subject to more policy supervision. Wang Jing told China business that recently, some industrial parks in Southeast Asia have been throwing "hydrangeas" and giving some preferential industrial policies to attract enterprises to relocate. For example, there is no tariff on the import of equipment and raw materials, and the export tariff for ten years is exempted at the same time.
"Before the policy is uncertain, I still maintain a wait-and-see attitude, but I have to make preparations in advance. If the implementation of the policy does cause some pressure on enterprises like us, it's better to move the enterprise abroad than endure in China, and our own sales market is mainly abroad." Wang Jing said.
Xu Lu, the Investment Promotion Director of saiseta in Vientiane, Laos, also told China business that e-cigarette enterprises have only begun to appear in their investment promotion vision since December last year, which has not been involved before, and two or three enterprises have consulted relevant policies recently.
Xu Lu said that he had docked with two enterprises in Shenzhen and showed interest in the Lao park. One of them is still waiting and watching, and the other has held meetings and discussions for many times, with strong willingness.
According to Xu Lu, when enterprises move to Laos, first, they have obvious advantages in labor cost. The general wage of workers is about $200 a month. Second, raw material procurement also has advantages. There are some local tobacco planting. Third, preferential policies. If you export 100%, the tax will be almost zero.
But Wang Jing is still hesitant. "Last year, more than 100 million yuan has been invested to upgrade production capacity in Songshan Lake, Dongguan, and a research and development team has been established. If it is completely relocated, it also means that the current office staff and online employees of the company will not be able to take them away. In addition, their families are also in China and do not want to leave their homes. Private enterprises should make efforts to earn foreign exchange for the country."
move out affects geometry
According to the data, the market scale (retail) of e-cigarettes in China is expected to be 19.7 billion yuan in 2021, with a year-on-year increase of 36%; The global market scale (retail) is expected to be US $80 billion, with a year-on-year increase of 120% and a three-year compound growth rate of 35%. In 2021, China's total export of e-cigarettes reached 138.3 billion yuan, a year-on-year increase of 180%; The country with the largest exports is the United States, accounting for more than half, followed by the European Union and Russia.
For this round of relocation overseas, Wang Jing said that Chinese employees are certainly unwilling to move out together. At that time, they can only be completely dismissed, resulting in the inevitable loss of a large number of personnel. He also said that the willingness of other countries to support also needs a certain return, such as mutual equity participation, technology sharing, intellectual property sharing, etc. in particular, the company has obtained invention patents and a number of utility model patents in major consumer markets including the United States, Japan, South Korea and Russia, and does not want to lose these valuable intellectual property rights abroad.
Liu Qi said that if a large number of e-cigarette manufacturers move out, it is bound to have some impact on the whole industry. At present, the global e-cigarette supply chain industry is basically concentrated in China. If the core link of manufacturing is relocated, it may lead to the loss of foreign exchange in China and the rise of costs in other links of the e-cigarette industry chain. At the same time, the core R & D personnel of e-cigarette manufacturers are concentrated in China. The relocation of manufacturing enterprises may also cause the loss of industrial talents. In some large factories, hundreds or thousands of workers live in China. If the factory is relocated, these workers can't take them away and can only be dissolved in situ.
Liu Qi added that the relocation of some manufacturers may also change the business of related enterprises upstream and downstream of this link. Although there are some fragmented manufacturers all over the world, no country has the whole e-cigarette industry chain like China. Therefore, once some head manufacturers in the supply chain move out, it may cause other enterprises in the supply chain to gradually migrate to other countries, which is also a potential risk.
It is worth noting that on March 20, Shenzhen City proposed in the "several measures of Bao'an District on promoting the high-quality development of advanced manufacturing industry and modern service industry" that it will support the development of regional characteristic and advantageous industries, encourage the agglomeration and development of enterprises in characteristic and advantageous industries such as new electronic atomization equipment, reward the implementation subjects of the construction of electronic atomization equipment professional park, and reward enterprises in characteristic and advantageous industries such as new electronic atomization equipment, Reward according to the increment of added value.
Many e-cigarette manufacturers also told first finance that the standardization of the industry is what enterprises expect, but they also hope that the policy will be more inclusive of the industrial development, so that the industry can grow stronger and stronger while the industry becomes more and more standardized.
