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< p > product upgrading, product substitution, two wheel drive microfiber industry is developing at a high speed.

Microfiber leather is a high-end product in the field of artificial leather. With its excellent performance, the substitution of natural leather and low-end artificial leather is the development trend of the industry. Under the background of consumption upgrading, microfiber products are also diversified and differentiated, and will be applied more widely in downstream shoes, furniture, steam cars and other fields.

We believe that most of the future public leather consumption will be occupied by high performance artificial leather represented by microfiber leather, and natural leather will be limited to high-end luxury goods because of its scarcity and high cost.

Although microfiber consumption has maintained an average growth rate of about 25% in recent years, it accounts for only about 4% of China's artificial leather output, and has a broader growth potential than the market share of about 50% of developed markets in Europe and the United States.

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< p > the supply of leather will shrink and Superfiber substitution will accelerate.

Microfiber products have advantages in cost performance, product performance is close to the genuine leather, and even some indicators exceed the genuine leather. The price of the product is only 1/5-1/2 of the real leather price.

China's real leather output in 2013 has seen a sharp decline, mainly due to the downstream industry's low prosperity, high product inventory, increasingly stringent environmental protection, limited supply of raw materials and other factors.

In addition, the imported leather covering half of the country is also showing a downward trend. Under the condition of insufficient supply of leather, the replacement of the dermis by ultrafine fibers will accelerate. We expect to focus mainly on leather shoes, sofas and vehicles.

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< p > the market competition pattern is good, leading enterprises have strong bargaining power.

Because of the high capital, technology and service barriers in the production of microfiber leather, there are less than 20 enterprises in our country. The capacity of the top four enterprises accounts for about 60% of the total production capacity and over 75% of the output, and the competition pattern is relatively stable.

In 2013, the output of China's ultra fiber leather is estimated to be 7000-7500 square meters, while the consumption of the same period is over 120 million square meters. There is still a big gap between supply and demand.

Due to the decline of industry boom, the investment growth rate has declined, and land and environmental protection policies have been tightened out of related enterprises. It is estimated that the effective capacity of the industry in the next 2014-2015 years can be less than 20 million square meters.

The super fiber leather is in the lower reaches of the polyurethane industrial chain, the downstream customers are dispersed and the demand is diversified. The leading enterprises make differential production according to the customer's needs, and have the characteristics of sales and service, and have a certain bargaining power.

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