State-owned enterprises and private enterprises are all busy preparing the bid for pesticide business licenses in Hainan Province in late Aug. 2011.

1. Companies Fighting to Seize Hainan Pesticide Market
Summary: State-owned enterprises and private enterprises are all busy preparing the bid
for pesticide business licenses in Hainan Province in late Aug. 2011.
Tags: Pesticide, Hainan Market, wholesale, retail, pesticide business licenses, SinoChem,
Nanjing Redsun, Davinci Furniture, RMB appreciation
August 17, 2011, CCM – According to the Implementation Measures of Hainan Province
Pesticide Wholesale and Retail Business License Management Regulation (Trial)
(Implementation Measures for short) released on 24 June 2011, pesticide wholesale enterprises
and retail enterprises should submit written application to Hainan Ministry of Agriculture for
attending the open bid of pesticide business licenses in Hainan Province, according to CCM’s
latest issue of Crop Protection China News.
As government will eventually confirm the enterprises which will be granted pesticide business
licenses within Aug. 2011, so far the pesticide companies in or out of Hainan Province are busy
preparing their written applications, including state-owned enterprises, private enterprises, etc.
It is set by Implementation Measures that till 2013, there will be no more than three pesticide
wholesale enterprises left in Hainan Province with registered capital of over USD15.2 million. As
for pesticide retail enterprises, the maximum number is set to be only 205 in the whole island and
the registered capital of the retail enterprises should not be less than USD152,000.
Some large state-owned wholesale enterprises in Hainan Province own the capability for the bid
of pesticide business licenses.
Hainan Agricultural Production Materials Co., Ltd., founded in 2008, is a large state-owned
enterprise with registered capital of USD15.2 million. It is considered to be the biggest agricultural
production means supplier in Hainan Province with 35,000 m2 warehouse and two provincial
distribution centers.
Haiken Agriculture Materials Co., Ltd., a large stated-owned enterprise, founded in June 2011
with registered capital of only USD310,078. It increased registered capital to USD15.2 million in
Jan. 2011, aiming to enlarge its market share of agricultural materials in Hainan Province.

2. With the advantages of state-owned background, some insiders in Hainan Province believe that
the two companies mentioned above are considered to be the default winners of the pesticide
business licenses bidding.
Some other large companies that own the abilities to bid for the pesticide business licenses
confirmed to attend the open bid, such as Hainan Agriculture Technology 110 Co., Ltd. (founded
by Science and Technology Department of Hainan Province), Grand Agriseeds Technology, Inc.,
a listed seed company in Hainan Province, etc.
In terms of small and medium size pesticide wholesale enterprises which are unwilling to lose
their business in Hainan Province, some of them have held together and co-founded a company
to bid for pesticide business licenses.
Despite these enterprises in Hainan Province are bidding for pesticide business licenses, a large
state-owned enterprise from outside Hainan Province, namely SinoChem Corporation
(SinoChem), unexpectedly announced to attend the bid. Therefore the involvement of SinoChem
makes the situation more complicated.
"We are not only eyeing the sales in Hainan Province but considering the changing pesticide
marketing channels there. If the pesticide business license system is successfully promoted in
Hainan Province, other provinces in China may be affected, thus our market distribution maybe
somewhat affected as well," says an insider from SinoChem.
It is still hard to predict the final list of the companies that will get pesticide business licenses. But
it is clear that the promotion of the policy would face lots of blocks in the near future. Hainan
Government will require those companies which have got pesticide business licenses to solve
the remaining problems after the withdrawal of unqualified companies, such as massive
unemployed population, inventory problems, even credit and debt concern.
So far, the implementation of Implementation Measures still encounters lots of difficulties. Many
pesticide dealers blame that the government carried out the new policy without seeking opinions
from the public. Additionally, governments from all levels in Hainan Province hold different
opinions on many parts of the policy according to their local conditions. Thus, many people in
Hainan Province still believe that the new policy's implementation can't be finished at the end of
2011. Moreover, the change of Hainan Government in H2 2011 has offered a good excuse for the
delay of implementation completion.
Source: Crop Protection China News 1115

3. http://www.cnchemicals.com/Newsletter/NewsletterDetail_16.html
Content of Crop Protection China News 1115:
Companies fighting to seize Hainan pesticide market
RMB appreciation bothers domestic pesticide industry
Credit sale: a sore point to domestic agricultural material dealers
Davinci Furniture scandal alerts domestic agriculture material industry
Future for EC formulations in China
Nanjing Redsun, NFP Group: M&A settled
Noposion net profit up 52.07% in H1 2011
China to popularize trichogramma wasps for crop pest control
Corn price hits record high
Crop Protection China News, a semimonthly publication issued by CCM International on 15th
and 30th(31th) of every month, aims to gain a deep insight into Chinese market, supply the latest
market data and strategy support, analyze the newest legislation and policy and grasp the future
market trend.
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