Crop Protection China NewsVol.5 Issue 1. 2011                                           14 Jan. 2011                      ...
Crop Protection China News                                                                                                ...
Crop Protection China News                                                                                      Vol.5 Issu...
Crop Protection China News                                                                                           Vol.5...
Crop Protection China News                                                                                           Vol.5...
Crop Protection China News                                                                                      Vol.5 Issu...
Crop Protection China News                                                                                          Vol.5 ...
Crop Protection China News                                                                                             Vol...
Crop Protection China News                                                                                              Vo...
Crop Protection China News                                                                                            Vol....
Crop Protection China News                                                                                       Vol.5 Iss...
Crop Protection China News                                                                                     Vol.5 Issue...
Crop Protection China News                                                                                         Vol.5 I...
Crop Protection China News                                                                                      Vol.5 Issu...
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Crop protection china news 201101

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It is published semimonthly by CCM International Limited, which bring you the latest information upon various factors related to this industry, such as dynamics of agrochemical companies, new legislations and policies, market trends, etc.

China’s crop protection plays a key role in international agrochemicals industry and draws more and more attention after it entering a phase with rapid development and reconstruction.

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Crop protection china news 201101

  1. 1. Crop Protection China NewsVol.5 Issue 1. 2011 14 Jan. 2011 Copyright © CCM International Limited
  2. 2. Crop Protection China News Vol.5 Issue 1 Content ■ Dynamic ...............................................................................................................1 Pesticide companies in Zhejiang relocating capacity ............................................................................................1 Overview: main pesticides situation in China 2010 ............................................................................................. 2 ■ Company.............................................................................................................. 3 Nantong Jiangshan to tide over glyphosate downturn by aid .............................................................................. 3 Hebei Veyong to involve in DME industry ........................................................................................................... 3 M&A: Lier Chemical and Jiangsu Kuaida ............................................................................................................. 4 Jiangsu Tianrong to relocate ................................................................................................................................. 5 ■ Financing ............................................................................................................. 6 Anhui Huilong to launch IPO ................................................................................................................................ 6 Jiangsu Limin wont get listed before Chinese Spring Festival of 2011 ............................................................... 7 ■ Crops ................................................................................................................... 8 China’s soybean import hits record high 2010 ..................................................................................................... 8 Average market price of main crops in China (14 Jan. 2010) .............................................................................. 9 Pest/disease forecast on rice in Jiangsu, 2011 ................................................................................................... 10 ■ News in Brief ..................................................................................................... 10 Pyrethroid Pesticides - Outlook for China Glyphosate China Crop Protection - Production and Market of Industry 2009-2014 Summit 2011 Abamectin in China - Production and Market of Will be held during 18 - 19 - Benzimidazole Fungicide Survey Chlorpyrifos in China March, Shanghai in China - Future Prospect of Genetically Welcome to join with us. - World Outlook of Chlorpyrifos Modified Crops Click here for Event Details. 2011-2015 - Fluthiacet-methyl Survey in - China Outlook for Mancozeb China Dynamic Database 2011-2016 - Seed Treatment Survey in China - ValoTracer - Survey of Amide Herbicides in - Nicosulfuron Survey in China China - Fertilizer Market in China - Triazole Fungicides Survey in - Glycine Survey in China China - Fipronil Survey in China - Corn Herbicides Survey in China - MIPA survey in China Online & real-time consulting - China Rice Insecticides Survey - Seed Survey in China system - Acephate Survey in China CCM newsletters related to - DETC Survey in China CP: Coming Reports from CCM: - Insecticides China News - Global Commercial Opportunities Ready Market Reports: - Herbicides China News Derived from Glyphosate Industry - Production and Market of Non - Fungicides China News - Production and Market of Crop Pesticides in China - Glyphosate China Monthly Azoxystrobin in China - Future of Plant Growth Report - Production and Market of Regulators in China 2010-2014 CCM International Limited II www.cnchemicals.com
  3. 3. Crop Protection China News Vol.5 Issue 1 Welcome to Crop Protection China News 1101. Headlines of Crop Protection China News 1101 It is reported that China’s No.1 Document will still focus on agricultural issue in China. The document will enhance the water conservancy construction in agriculture to safeguard China’s grain production. M ore and more pesticide companies in Zhejiang Province have been relocating their pesticide production capacities to other provinces in recent The first document of the year, dubbed "Number.1 years. Document" in China and jointly issued by the Central Committee of the Communist Party of China and the State Council, always states the future works that the government will attach great importance to during M ain pesticides’ demand in China witnesses steady growth in 2010. the year. Although China’s grain production hits a record high in 2010, the grain produced by China itself still fails R ecently, Nantong Jiangshan is aided by local government and shareholders to get through the downturn of glyphosate. to meet the demand. China has to import more and more grain to fill the gap. China’s soybean import also hits a record high in 2010, with volume of 54.80 million tonnes. Besides, China imported a large O n 6 Jan. 2011, Hebei Veyong announces that its transaction with ENN Energy has been approved by CSRC. amount of corn in 2010, the first time in recent years. The prices of most crops witness huge increase in 2010. The prices of cotton, corn, wheat, soybean, etc., L ier Chemical and Jiangsu Kuaida’s M&A is approved by CSRC. all record high peak in history. However, domestic peasants’ planting enthusiasm in China is rather low at present although prices of most agricultural J iangsuTianrong starts to relocate recently. commodities hit a record high. Most peasants hold the view that they can earn more by working in cities than planting crops. Besides, R ecently, Anhui Huilong, a large chain store company of agricultural materials, announces to launch IPO in the near future. the prices of agricultural production means such as seeds, pesticides, fertilizers, etc., increase faster than that of crops, which undermine a huge part of the profits. J iangsu Limin wont get listed before Chinese Spring Festival of 2011. To safeguard the food security in domestic market is estimated to be one of the priorities for Chinese C hina imports 54.80 million tonnes of soybean in 2010, hitting a record high. government. Location of key companies covered in this issue RMB Exchange Rate, 14 Jan. 2011 100USA 659.89 100EUR 876.91 Source: The Bank of China (BOC) CCM International Limited I www.cnchemicals.com
  4. 4. Crop Protection China News Vol.5 Issue 1 ■ Dynamic Pesticide companies in Zhejiang relocating capacity Z hejiang Province is once the second important pesticide production base in China, but it has developed slowly in recent years compared with other important pesticide production bases such as Jiangsu Province and Shandong Province. More and more pesticide companies in Zhejiang Province have been relocating their pesticide production capacities to other provinces in recent years due to the high production cost in Zhejiang. According to CCM’s survey, over 15 pesticides companies have relocated part of their pesticide production capacities to other provinces. Besides, many other pesticide companies are planning to relocate in the near future. Leading pesticide companies in Zhejiang, such as Zhejiang Wynca Chemical Industry Group Co., Ltd. (Zhejiang Wynca), Zhejiang Shenghua Biok Biology Co., Ltd. (Zhejiang Biok), Zhejiang Heben Pesticide & Chemicals Co., Ltd. (Zhejiang Heben), Zhejiang Jinfanda Bio-chemical Co., Ltd. (Zhejiang Jinfanda), etc., all have set subsidiaries in other provinces. “Many Zhejiang pesticide companies have invested in other provinces in recent years, but no company from other regions invests in Zhejiang in the mean time.” reveals an insider from Zhejiang pesticide industry. Pesticides companies in Zhejiang relocate pesticide production capacities to other provinces by building subsidiaries, cooperating with companies in other provinces, or acquiring other pesticide companies. They mainly relocate their technical business to other regions and their plants in Zhejiang mainly produce pesticide formulations and part of pesticide technical.The high production cost in Zhejiang is the main reason for the relocations. As a relatively developed region in China, the requirement for environmental protection in Zhejiang is so strict that pesticide companies find it hard to meet the demand. Besides, the land cost is high in Zhejiang. Different from Zhejiang Province, pesticide industry in Jiangsu and Shandong enjoys more support from the government. They have built many pesticide industry parks and encourage pesticide companies to relocate into them. The famous pesticide industry parks include Rudong National Industrial Park (Jiangsu), Weifang National Pesticide Industrial Zone (Shandong) and Rudong Yangkou Chemical Industrial Park (Jiangsu). Besides Jiangsu and Shandong, Hubei, Jiangxi, Anhui, etc., also have built some pesticides industry parks to encourage pesticide companies to relocate. With the increasing pressure from environmental protection and land cost, it is estimated that more and more pesticide companies in Zhejiang Province will relocate their pesticide production capacities to other provinces. The relocation is expected to bring more chances to the company’s further development. Additionally, pesticide manufacturers can take this opportunity to upgrade production technology and optimize product structure during the relocation, thus strengthening competitiveness in the market. Zhejiang has dropped to the third important pesticide production base in China at present, after Jiangsu and Shandong. There are 84 pesticide production companies (including 51 technical pesticide companies) in Zhejiang by the end of 2010, decreasing from 92 by the end of 2009. TABLE 1: Pesticide companies in Zhejiang relocate capacity to other regions Company Location of its subsidiary Remark on its subsidiary Zhejiang Wynca Zhenjiang City, Jiangsu Mainly for glyphosate Zhejiang Biok Inner Mongolia Mainly for avermectin Zhejiang Heben Rudong City, Jiangsu With investment of USD34.74 million Zhejiang Yongnong Laizhou City, Shandong Launched in March 2010 Zhejiang Jinfanda Hubei and Jiangxi For PMIDA and other fine chemicals Hangzhou Qingfeng Xuancheng City, Anhui With investment of USD5.74 million Sinochem Ningbo Ltd. Lianyungang City, Jiangsu Propiconazole, tebuconazole, etc. Zhejiang Yifan Jiangsu Covering 15.3 ha. Note: Zhejiang Yongnong Chem. Ind. Co., Ltd. (Zhejiang Yongnong); Zhejiang Jinfanda Bio-chemical Co., Ltd., (Zhejiang Jinfanda); Hangzhou Qingfeng Agrochemical Co., Ltd. (Hangzhou Qingfeng); Zhejiang Yifan Chemicals Co. Ltd. (Zhejiang Yifan) Source: CCM International CCM International Limited 1 www.cnchemicals.com
  5. 5. Crop Protection China News Vol.5 Issue 1 Overview: main pesticides situation in China 2010 W ith slight recovery in domestic pesticide industry in 2010, the output of pesticide witnesses continuous growth, predicted to exceed the output in 2009, about herbicides is converting to the new products with high effect, low toxicity and low dosage. 2.26 million tonnes. Although the output of pesticide in The demand for mainstream herbicides, like alachlor, China continuously enlarges in 2010, domestic demand butachlor, acetochlor, atrazine and trifluralin, inordinately and price, on the contrary, see slide. The domestic decreases in 2010 due to the promotion of foreign consumption and export of pesticide are still far less than herbicides and off-patent herbicides. the output in 2010 and overcapacity condition still exists. Nicosulfuron, an off-patent herbicide, has become one of The phenomenon in domestic pesticide market in 2010 the hot herbicides in China since 2007 when its patent better explains the bad performance of most pesticide expired. Nicosulfuron has been in short supply in most of players in China in the same period, such as overcapacity, the peak season in recent years. So far, there are more than production cost increased by the policy of environmental 26 enterprises registered the production of nicosulfuron protection, RMB appreciation, abnormal weather, impacts in China, with total capacity of more than 2,000t/a. from foreign pesticides with better quality and efficiency, Moreover, Hefei Fengle Seed (Group) Co., Ltd., a listed etc. seed company in China, also announced to build a 500t/a nicosulfuron production line in 2010. The main trend is that the demand for highly effective and lowly toxic pesticides is increasing, although there are However, overcapacity and intense competition are still the differences among insecticde, fungicide and herbicide. dominant themes of herbicide industry in 2010. Financial crisis, abnormal weather, descending planting passion of Insecticide peasants all affected the demand for glyphosate, acetochlor and atrazine. The consumption of insecticide in 2010 witnesses decrease, in some places even seeing 30% decline according to junior Fungicide crop protection officers. The demand for fungicide witnesses growth in 2010, With China strongly limiting highly toxic pesticides in especially highly effecient and lowly toxic ones, ascribed domestic market, the output of some organophosphorus to abnormal weather as well as adjustment of agricultural insecticides witnesses slide in 2010, such as phorate, planting structure. isocarbophos, isofenphos-methyl, terbufos, etc. Along with the large promotion of pest-resistant cotton in China Triazole fungicides stage good sales in 2010, aided by recently, the occurrence of cotton bollworm, cotton spider more serious occurrence of rice diseases, such as sheath mite has been controlled, leading to slide in the usage of blight, false smut and rice blast on the middle and late profenofos insecticides in 2010. rice in China, for about 19.2 million ha. The demand for thiophanate-methyl, carbendazim, zineb and bordeaux is Overcapacity still baffles domestic chlorpyrifos players also increased by the serious occurrence of vegetable and in 2010. China’s chlorpyrifos capacity in 2010 reaches fruit diseases in 2010. 116,000t/a, however, domestic demand and export of chlorpyrifos are just 18,100 tonnes and 19,800 tonnes Moreover, some imported fungicides, such as Armure (estimated based on the data from Jan. to Oct. 2010). This (Syngenta), Cuproxat (Nufarm), Horizor (Bayer) and condition has caused deficit of many chlorpyrifos players Dithane (Dow), become the hot products in China 2010. in China. Outlook On the other hand, owing to the prohibition of the five kinds of highly toxic pesticides and the phase out of Total amount of pesticide demand in China will hit fipronil since 1 Oct. 2009, the demand for highly toxic 310,000 tonnes (converted into 100% purity) in 2011 pesticide alternatives, such as pymetrozine, chlorpyrifos, according to predicted data from crop protection stations abamectin, emamectin, acetamiprid, has correspondingly of 31 provinces (including autonomous regions and increased. municipalities), up 2.69% compared with 2010. Insecticides which are largely consumed in domestic Domestic demand for insecticides in 2011 will come to market in 2010 include dichlorvos, phoxim, buprofezin, 124,900 tonnes, down 1.43% compared with 2010. The trichlorfon, dimethoate, isoprocarb, bisultap, chlorpyrifos, demand for herbicide and fungicide will reach 97,500 cyhalothrin, abamectin, etc. tonnes and 72,800 tonnes respectively in 2011, up 9.33% and 2.94% respectively over 2010. Herbicide Generally speaking, the demand and consumption of herbicide in 2010 witness stable growth attributed to increasing application area, change of agricultural planting structure and business model, etc. Domestic usage of CCM International Limited 2 www.cnchemicals.com
  6. 6. Crop Protection China News Vol.5 Issue 1 ■ Company Nantong Jiangshan to tide over glyphosate downturn by aid N antong Jiangshan Agrochemical & Chemicals Co., Ltd. (Nantong Jiangshan), a large listed pesticide enterprise in China (Code No. 600389) revealed the completion of some of its new pesticide production lines, 38,000t/a 41% AS of glyphosate, 20,000t/a 62% AS of glyphosate and 12,000t/a technical of PMIDA, and a 30,000t/a glyphosate technical production line and some other formulation production lines to be finished. The desire for capital may be the most important thing for Nantong Jiangshan at present. After serial hard work on negotiations, the company finally receives the help from its shareholders and local government. On 2 Dec. 2010, Nantong Jiangshan revealed to sell 19.65% equity of Nantong Jiangtian Chemicals Co., Ltd. (Nantong Jiangtian), a chemical subsidiary of it. The total capital involved in the transaction reached USD3.22 million. After the transaction, Nantong Jiangshan’s shareholding ratio of Nantong Jiangtian dropped to 22.23% from the previous 41.88%. Later on 7 Dec. 2010, Nantong Jiangshan received a categorical grant from local government of about USD21.15 million, aiming to compensate the loss of one year’s production suspension of some production bases in Nantong Jiangshan. On 11 Jan. 2011, Nantong Jiangshan announces that it will receive a no more than USD45.32 million’s loan from its shareholders, SinoChem International Corporation (SinoChem International), aiming to meet its financial needs in 2011. SinoChem International will provide the loan indirectly through bank. The company announced that the capital involved in these events will be counted in the loss and gain of 2010; thus, the net profit of 2010 is predicted to grow. Nantong Jiangshan as one of the largest glyphosate players in China is also the most serious affected company among the listed glyphosate players in China who have suffered the downturn of glyphosate since H2 2008. Nantong Jiangshan is mainly engaged in the production and sales of glyphosate, dichlorvos and other fine chemicals. So far, the technical capacity of glyphosate in Nantong Jiangshan reaches 70,000t/a. It is the second largest glyphosate player in China while the first one is Zhejiang Wynca Chemical Industry Group Co., Ltd. with glyphosate technical capacity of 80,000t/a in 2010. According to H1 2010 financial report of Nantong Jiangshan, the revenue of glyphosate reaches USD81.12 million, accounting for 48.82% of its total revenue. However, profit margin of glyphosate in this period is just 1.91%, down 3.81% over H1 2009. Dragged by glyphosate, Nantong Jiangshan firstly predicted its net profit of 2010 to be deficit after it released its Q1-Q3 financial report. However, owing to frequent moves on financial transaction recently, on 11 Jan. 2010, Nantong Jiangshan predicts net profit of 2010 to grow. It is still hard to predict how Chinese glyphosate market will be in 2011. According to the analysis by CCM, although growth rate of glyphosate may stay at 5%-10% in the next 5-10 years due to no better substitute developed, it can’t catch up with the growth rate few years ago. More intense competition will continue to be the main theme in the global market in 2011. Hebei Veyong to involve in DME industry O n 6 Jan. 2011, Hebei Veyong Bio-Chemical Co., Ltd. (Hebei Veyong), the biggest abamectin player in China, announces that its transaction with ENN Energy (Xinneng Bengbu) to involve in the production and sales of methoxymethane (DME), a kind of raw material of pesticide. Holding Limited (ENN Energy), a Chinese energy group listed on Hong Kong Exchanges and Clearing Limited, has After the transaction, 75% equity of Xinneng Zhangjiagang been approved by China Securities Regulatory Commission and 100% equity of Xinneng Bengbu will be controlled (CSRC). by Hebei Veyong with the total cost of about USD83.12 million. According to Hebei Veyong, it will acquire large equity of ENN Energy’s two wholly owned subsidiaries, namely However, the transaction will not be dealt in cash. Hebei Xinneng Energy Zhangjiagang Co., Ltd. (Xinneng Veyong intends to issue equivalent A shares to ENN Energy, Zhangjiagang) and Xinneng Energy Bengbu Co., Ltd. about 75.39 million shares, accounting for 24.18% of its CCM International Limited 3 www.cnchemicals.com
  7. 7. Crop Protection China News Vol.5 Issue 1 total equity. Till then the total shares of Hebei Veyong will reported to CSRC to get approval according to Measures finally come to about 311.83 million. for Administration of Material Assets Reorganization of Listed Companies, which came into force on 18 May 2008. In recent years, DME has been publicly known in the world as one of the clean energies and high-quality chemical Hebei Veyong believes it is the right choice to purchase raw materials. In China DME is largely used to be mixed DME capacity from ENN Energy since the rising prices in liquefied petroleum gas (LPG) and produce chemicals. of raw materials and energy have been one of the main Although it is calculated that domestic capacity of DME reasons to drag down its net profit growth in 2007 and has reached 6,500,000t/a to 8,000,000t/a in 2010, most 2008, down 46.24% and 49.31% respectively year on year. of DME players operating rates are less than 20% due to With the large capacity Hebei Veyong involved, it will the impact of global financial crisis and the large-scale bring down its total cost of raw materials. nationwide campaigns on regulating LPG in June 2010. Moreover, as more and more strict policies on cleaner Actually, eyeing the great prospects of DME in the future, production have been continuously carried out by Chinese Hebei Veyong started negotiating the acquisition proposal government, DME will see great opportunity in China and with ENN Energy early on 26 Aug. 2008. Later on 15 Oct. the sales of DME will finally bring profit to Hebei Veyong. 2008, after about two months negotiation, both sides finally reached an agreement. For the past two years, the Hebei Veyong, founded in 1992, is the first Hebei-based transaction plan is under evaluation and government’s enterprise to get listed. Hebei Veyong is a comprehensive investigation. company that applies itself to R&D, production and sales of pesticide formulations. Currently, the company’s Owing to the net assets involved in this transaction main products include abamectin, paraquat, emamectin exceeding USD7.54 million and surpassing 50% of Hebei benzoate, imidacloprid, etc. Veyongs net assets in 2009, the transaction has to be FIGURE 1: Hebei Veyong’s sales and net profit, 2006~Q1-Q3 2010 Source: Hebei Veyong’s financial reports from 2006 to Q1-Q3 2010 M&A: Lier Chemical and Jiangsu Kuaida O n 30 Dec. 2010, Lier Chemical Co., Ltd. (Lier Chemical), the largest chloropyridine herbicide player in China, releases that its reorganization with Jiangsu Kuaida Agrochemical Co., Ltd. (Jiangsu Kuaida), a high-tech pesticide company in Jiangsu Province, has been approved by China Securities Regulatory Commission (CSRC). According to Lier Chemical, Lier Chemical will pay approximately USD25.64 million to obtain 64,384,898 stakes of Jiangsu Kuaida, accounting for 51% equity of Jiangsu Kuaida. Different from normal acquisitions among listed companies, the M&A between Lier Chemical and Jiangsu Kuaida is considered as a major assets reorganization of Lier Chemical due to the high purchasing price. Lier Chemical is very exited about the M&A with Jiangsu Kuaida and is also confident of its business performance after the transaction. Lier Chemical predicts that its revenue is to witness 100% growth in 2011 and net profit to achieve 30% to 50% growth in H1 2011. Actually, aiming to reduce the risk of single production structure and seize the opportunity to merge advantage enterprises with complementary businesses, Lier Chemical launched the proposal of M&A with Jiangsu Kuaida on 28 April 2010 and it is considered to be the first reorganization announcement in pesticide industry in 2010. After serial months audit and investigation, CSRC finally approves the transaction. So far, Lier Chemical is mainly engaged in the technical production and export of chloropyridine herbicides. Although it struggles to enlarge the formulation sales in domestic market, the terminal market sales of formulations still witness CCM International Limited 4 www.cnchemicals.com
  8. 8. Crop Protection China News Vol.5 Issue 1 undergrowth. The global market revenue of Lier Chemical in H1 2010 reaches USD33.96 million, about 5.5 times more than the revenue in domestic market. Jiangsu Kuaida obtains diversified pesticide production capacities, with over seventy pesticide products including herbicides, fungicides and insecticides. According to Lier Chemical, the largest attraction of Jiangsu Kuaida is its excellent performance in domestic market. With serial decades development in domestic pesticide market, Jiangsu Kuaida owns rich domestic market resources and its sales network covers large areas of China. Over 800 agents are distributed in many large agricultural provinces, such as Heilongjiang Province, Shandong Province, Jiangsu Province, Hunan Province, Hubei Province, Anhui Province, etc. With the continued recovery of domestic pesticide market in 2011 and the cooperation with Jiangsu Kuaida, Lier Chemical’s performance in domestic market is believed to witness huge growth in 2011. Moreover, Lier Chemical’s herbicide business will be largely strengthened after the M&A, as the two companies are both strong in herbicide industry. Among Jiangsu Kuaida’s pesticide business, sales of herbicide is the largest, accounting for over 80% of the total revenue. Although it has suspended glyphosate’s production due to the continuously depressed price of glyphosate in the world. The equipment for glyphosate production is still under normal maintenance and will resume production as soon as the price of glyphosate recovers. Lier Chemical, founded in 1993 by China Academy of Engineering Physics, is a Sino-foreign joint venture mainly engaged in research and development, production, application and sales of agrochemicals. It is famous for chloropyridine herbicide production in China. Its revenue in Q1-Q3 of 2010 hits USD54.68 million, up 10.18% year on year and net profit in this period reaches USD10.42 million, down 25.02% year on year. Jiangsu Kuaida, entirely reformed from Rudong Pesticide Factory, is a comprehensive pesticide and chemical enterprise. It is the largest substituted urea herbicide production base (diuron, isoproturon, chlortoluron, linuron, fluometuron, etc.) in China, with I/E license. At present, it mainly produces fifty kinds of products, including three series of pesticides (herbicides, insecticides and bactericides), acyl chloride series of intermediates (for pesticide, medicine and dye) and a series of phosgenation intermediates (for pesticide, medicine and dye), etc. TABLE 2: Pesticide performance of Jiangsu Kuaida, H1 2010 Product Type Capacity, t/a Output, tonnes Sales, million USD technical 9,600.00 3,011.73 168.81 Herbicide formulation 12,900.00 3,324.09 6.37 technical 400.00 170.87 1.93 Fungicide formulation 500.00 135.56 1.10 technical 3,100.00 465.00 1.86 Insecticide formulation 5,000.00 687.52 0.74 Source: Major assets acquisition report of Lier Chemical Jiangsu Tianrong to relocate J iangsu Tianrong Group Co., Ltd. (Jiangsu Tianrong), an outstanding pesticide player in China, launches its relocation plan recently. Jiangsu Tianrong is temporarily predicted to reach about 100,000t/a till then. “The capacity will be definitely expanded, but accurate data According to an insider from Jiangsu Tianrong, the of how much it will be after the construction is still not relocation will last until Nov. 2011 due to its large-scale clear. We shall decide according to the 12th Five-Year Plan construction of the new factory. Under the great pressure (2011-2015). And we will also add some new products; they from Pesticide Industry Policy which carried out last are also not decided yet.” says the insider. year aiming to crack down on domestic chaotic pesticide industry, the company decides to wholly relocate into Actually, a subsidiary of Jiangsu Tianrong, namely Jiangsu Xiangshui Chemical Industrial Park (Yancheng City, Lulilai Co., Ltd. (Jiangsu Lulilai), a large herbicide player Jiangsu Province). with total capacity of 20,000t/a, has already started to relocate into the industrial park since 2010. The total investment in this relocation will reach USD123.10 million and some of the new production lines Jiangsu Tianrong has planned to wholly relocate in are now under construction. The old factories are still 2010, but it decided to relocate separately by different under production until the new production lines are to subsidiaries due to the large projects and capital investment be completed at the end of 2011. The total capacity of involved. This year, another subsidiary of Jiangsu CCM International Limited 5 www.cnchemicals.com
  9. 9. Crop Protection China News Vol.5 Issue 1 Tianrong will also launch relocation, namely Jiangsu Ruihe including three production companies, one trade company Chemical Co., Ltd., which is mainly engaged in herbicide and one research company, namely Jiangsu Tianrong, production. The relocation of the rest subsidiaries will be Jiangsu Ruihe Chemistry Co., Ltd., Jiangsu Zhongyi Co., conducted in the following years. Ltd., Jiangsu Tianrong International Trade Co., Ltd. and Liyang Tianrong Research Institute Co., Ltd. Jiangsu According to the insider, aiming to raise funds to increase Tianrong is the mother company of the rest subsidiaries. the competition strength and further expand the business range, Jiangsu Tianrong intends to get listed in 2011. It Jiangsu Tianrong, with total assets of USD22.66 million, has submitted application to China Securities Regulatory is reorganized from Jiangsu Liyang Chemical Factory. Its Commission (CSRC) in 2010. CCM will pay close attention average annual revenue in recent years reaches USD75.53 to the IPO process in the future. million. It is famous for the production and research on nereis toxins insecticides and sulfonylurea herbicides in Jiangsu Tianrong Group, locates in Nanjing City of Jiangsu China and is estimated to be the largest player of these Province, is a large high-tech group composed of pesticide pesticides in domestic pesticide industry. production (main business), international trade and package printing, etc. It now owns five large subsidiaries, TABLE 3: Capacity of main pesticides of Jiangsu Tianrong after relocation Product Capacity, t/a Product Capacity, t/a Monosultap 11,000 Metsulfuron 200 Bisultap 12,450 Chlorsulfuron 100 Cartap 6,000 Chlorimuron-ethyl 100 Thiocyclam-hydrogenoxalate 200 Tribenuron 200 Beta-cypermethrin 100 Ethametsulfuron 100 Bifenthrin 100 Pyridine-ethyl 200 Quizalofop-P-ethyl 300 Bensulfuron 300 Fenoxaprop-P-ethyl 1,000 Nicosulfuron 300 Other formulations and by-products 67,350 - - Total 100,000 - - Source: Jiangsu Tianrong ■ Financing Anhui Huilong to launch IPO R ecently, Anhui Huilong Agricultural Means of Production Co., Ltd. (Anhui Huilong), a large chain store company of agricultural materials in Anhui Province, releases prospectus aiming to launch IPO in the near future. Anhui Huilong intends to get listed on Shenzhen Stock Exchange A share market and offer 37.5 million shares to public. After the offering, Anhui Huilong’s total shares will reach 149.5 million. However, the price of each share and the accurate IPO date are still under discussion. According to Anhui Huilong, the raised funds in the IPO will be invested in the building of new distribution centers and information system, aiming to build up 20 standardized distribution centers in China. Ten of these 20 standardized distribution centers will be built inside Anhui Province and others will be built elsewhere. Total investment of the two projects is estimated to be USD61.06 million, including USD56.17 million invested in the construction of new distribution centers and USD4.89 million invested in the building of information system. Anhui Huilong is mainly engaged in chain operation of major agricultural materials, such as fertilizer, pesticide, seed, etc., especially fertilizer (annual sales volume of over 1.8 billion tonnes in recent years). With years’ development, Anhui Huilong has built up 56 standardized distribution centers and over 2,300 chain stores in nine main agricultural material consumption provinces, such as Heilongjiang Province, Jilin Province, Henan Province, Jiangsu Province, etc. The revenue and net profit of Anhui Huilong in Q1-Q3 2010 mounts to USD635.39 million and USD14.24 million respectively. If the IPO of Anhui Huilong is successfully launched, it will become the first chain store company of agricultural materials to get listed since 2010. With the exemplary role Anhui Huilong takes, more and more chain store companies may resort to getting listed in the near future. Some domestic influential chain store companies obtain the capability to get listed, CCM International Limited 6 www.cnchemicals.com
  10. 10. Crop Protection China News Vol.5 Issue 1 especially for Huiwanjia Agriculture Capital Chain Co., Ltd. and Guangdong Tianhe Agricultural Means of Production Co., Ltd., which have announced to get listed in 2011 or 2012. It is incompletely estimated that at present there are more than 4,000 chain store companies of agricultural materials in China, largely increased since the first one appeared in 2000. Chinese government has given large support to this kind of operation modes and continuously issued related supportive policies, such as the “Chinas No.1 Document” in early 2010. However, the current chain store mode accounts for merely 20% market share in China, much lower than the mainstream ways that agricultural materials being distributed by dealers. As the complex circulation of the traditional sales mode pushing up the cost of circulation, especially the rail transport cost raised in 2009, more and more agricultural material companies start to do everything possible to cut down the cost in circulation. With advantage in cutting processing links of circulation, agricultural materials’ price can be reduced, which shows great competitiveness in domestic market, bringing great opportunities to chain store mode. It is foreseeable that under the support of government and led by leading enterprises, chain store mode will gradually become the mainstream in current industry of agricultural materials. TABLE 4: Large chain store companies in China Company Jinxiu Qiancun Agricultural Materials Sales (Chains) Co., Ltd. Xiyangyang Agricultural Materials Sales (Chains) Co., Ltd. Huiwanjia Agriculture Capital Chain Co., Ltd. Shandong A&fine Agricultural Materials Co., Ltd. Zhejiang Taizhou Nongzi Co., Ltd. Shaanxi Limin Agricultural Materials Sales (Chains) Co., Ltd. Guangdong Tianhe Agricultural Means of Production Co., Ltd. Source: CCM International Jiangsu Limin wont get listed before Chinese Spring Festival of 2011. J iangsu Tianrong Group Co., Ltd. (Jiangsu Tianrong), an outstanding pesticide player in China, launches its relocation plan recently. with total capacity of 20,000t/a, has already started to relocate into the industrial park since 2010. Jiangsu Tianrong has planned to wholly relocate in According to an insider from Jiangsu Tianrong, the 2010, but it decided to relocate separately by different relocation will last until Nov. 2011 due to its large-scale subsidiaries due to the large projects and capital investment construction of the new factory. Under the great pressure involved. This year, another subsidiary of Jiangsu from Pesticide Industry Policy which carried out last Tianrong will also launch relocation, namely Jiangsu Ruihe year aiming to crack down on domestic chaotic pesticide Chemical Co., Ltd., which is mainly engaged in herbicide industry, the company decides to wholly relocate into production. The relocation of the rest subsidiaries will be Xiangshui Chemical Industrial Park (Yancheng City, conducted in the following years. Jiangsu Province). According to the insider, aiming to raise funds to increase The total investment in this relocation will reach the competition strength and further expand the business USD123.10 million and some of the new production lines range, Jiangsu Tianrong intends to get listed in 2011. It are now under construction. The old factories are still has submitted application to China Securities Regulatory under production until the new production lines are to Commission (CSRC) in 2010. CCM will pay close attention be completed at the end of 2011. The total capacity of to the IPO process in the future. Jiangsu Tianrong is temporarily predicted to reach about 100,000t/a till then. Jiangsu Tianrong Group, locates in Nanjing City of Jiangsu Province, is a large high-tech group composed of pesticide “The capacity will be definitely expanded, but accurate data production (main business), international trade and of how much it will be after the construction is still not package printing, etc. It now owns five large subsidiaries, clear. We shall decide according to the 12th Five-Year Plan including three production companies, one trade company (2011-2015). And we will also add some new products; they and one research company, namely Jiangsu Tianrong, are also not decided yet.” says the insider. Jiangsu Ruihe Chemistry Co., Ltd., Jiangsu Zhongyi Co., Ltd., Jiangsu Tianrong International Trade Co., Ltd. and Actually, a subsidiary of Jiangsu Tianrong, namely Jiangsu Liyang Tianrong Research Institute Co., Ltd. Jiangsu Lulilai Co., Ltd. (Jiangsu Lulilai), a large herbicide player Tianrong is the mother company of the rest subsidiaries. CCM International Limited 7 www.cnchemicals.com
  11. 11. Crop Protection China News Vol.5 Issue 1 Jiangsu Tianrong, with total assets of USD22.66 million, is reorganized from Jiangsu Liyang Chemical Factory. Its average annual revenue in recent years reaches USD75.53 million. It is famous for the production and research on nereis toxins insecticides and sulfonylurea herbicides in China and is estimated to be the largest player of these pesticides in domestic pesticide industry. TABLE 5: Capacities of key pesticide technicals of Jiangsu Limin in 2010 No. Fungicide Capacity, t/a 1 Mancozeb 20,000 2 Chlorothalonil 7,000 3 Cymoxanil 1,000 4 Metam-sodium 5,000 5 Propineb 5,000 6 Fosetyl-Al 2,000 7 Difenconazole 100 8 Azoxystrobin 100 9 Thiacloprid 500 Source: Jiangsu Limin TABLE 6: New production lines of Jiangsu Limin to be constructed after IPO No. Fungicide Capacity 1 Pyrimethanil 500t/a technical and SC formulation 2 Cymoxanil 2,000t/a technical and WDG formulation 3 Azoxystrobin 100t/a technical and WDG formulation 4 Folpet 2,000t/a technical and WDG formulation Source: Jiangsu Limin ■ Crops China’s soybean import hits record high 2010 A ccording to statistics that China Customs released on 10 Jan. 2011, China imports 54.80 million tonnes of soybean in 2010, up 12.25 million tonnes over 2009 which was 42.55 million tonnes. The soybean import volume in 2010 is the highest in history. Insiders from domestic soybean industry expect that the soybean import volume will continue to increase in 2011, but the growth rate will see decline. China’s soybean import volume has witnessed continuous increase since 2005, but the increase volume in 2010 is the biggest, with the grow rate of 28.78%. The increase volume first exceeds 10 million tonnes. The huge increase in the soybean import is first attributed to China’s restriction on soybean oil from Argentina in 2010. Before 2010, China usually imports about 1 million tonnes to 2 million tonnes of soybean oil from Argentina every year. Since China restricted the import of soybean oil from Argentina in 2010, it had to import more soybeans to meet the oil demand in domestic market. China imports 6.87 million tonnes of plant oil in 2010, 1.29 million tonnes less than that in 2009. If China uses soybean to fill gap, it has to import about 7 million tonnes more of soybean, as the oil content of the soybean is about 19%. Besides, oil demand is very strong in China and soybean oil has become the most important edible oil in domestic market. It is estimated that domestic’s soybean crush capacity will exceed 100 million tonnes annually by the end of 2011. CCM International Limited 8 www.cnchemicals.com
  12. 12. Crop Protection China News Vol.5 Issue 1 It is expected that the soybean import volume will keep an uptrend in 2011, but the growth rate will witness some decrease. First, China has stopped the restriction on import of soybean oil from South America, so the import of soybean oil may witness some increase in 2011, which would reduce the dependence on the import of soybean. Besides, Chinese government reserved a batch of soybean in 2008. The government may sell this batch of soybean in 2011. However, China will become more and more dependent on imported agricultural commodities. The planting area in China is limited, but the demand for agricultural commodities has witnessed huge increase in recent years. What makes things worse is that the planting enthusiasm in China is low at present although China has implemented some subsidies for agricultural production and the prices of agricultural commodities are increasing. Most peasants think that they can earn more by working in cities than planting crops. Besides, the prices of agricultural production means such as seeds, pesticides, fertilizers, etc., increase faster than that of crops, which reduces a big part of the profit. As for the domestic soybean industry, things are even worse. Domestic peasants are more like to plant corn and wheat because soybean is a less profitable crop than wheat or corn in China. FIGURE 2: China’s soybean import volume, 2005 to 2010 China Customs Average market price of main crops in China (14 Jan. 2010) 14-Jan-11 31-Dec-10 Jan-10 Crops USD/t RMB/t USD/t RMB/t USD/t RMB/t Wheat 321 2,118 323 2,128 292 1,997 Corn 297 1,958 295 1,947 255 1,744 Soybean(oil) 641 4,233 660 4,350 580 3,962 Soybean(food) 750 4,950 766 5,050 659 4,500 Peanut 1,394 9,200 1,381 9,100 1,171 8,000 Indica rice 505 3,330 501 3,300 442 3,020 Japonica Rice 595 3,926 586 3,860 470 3,210 Rapeseed 591 3,900 645 4,250 578 3,950 Broomcorn 305 2,010 316 2,080 307 2,100 Source: CCM International CCM International Limited 9 www.cnchemicals.com
  13. 13. Crop Protection China News Vol.5 Issue 1 Pest/disease forecast on rice in Jiangsu, 2011 Crop Main pests/diseases Occurrence area, ‘000 ha. Occurrence time Rice leaf roller 4,066 2011 Rice plant hopper 5,000 2011 Rice stem borer 866 2011 Rice walker 666 2011 Rice Rice blast 533 2011 Rice sheath blight 2,133 2011 Rice black-streaked dwarf 333 2011 Rice false smut 1,000 2011 Source: CCM International ■ News in Brief Jiangsu Anpon initiates ionic membrane caustic soda production Jiangsu Anpon Electrochemical Co., Ltd. (Jiangsu Anpon), one of the leading pymetrozine producers in China, has launched its 200,000t/a ionic membrane caustic soda project in 25 Dec. 2010. The project was started in 2007, but it was delayed by the global financial crisis in 2008. Jiangsu Anpon restarted the project in 2009 and the project was finally completed in 2010. Freezing rain and snow impacts greenhouse vegetable production Freezing rain and snow has hit Hunan, Chongqing and Guizhou, etc. since 1 Jan. this year. The low temperature caused by the freezing rain and snow has impacted the agricultural production in these regions, especially the greenhouse vegetable production. A batch of illegal isocarbophos found in Hainan Hainan Industrial and Commercial Bureau recently found 600 bottles of isocarbophos in Haikou City, Hainan Province. "Isocarbophos was banned for use in Hainan Province. The offender will be punished according to law. The maximum penalty for the logistics company is USD7,550 and the maximum penalty for the owner of the pesticide is USD4,530." Hainan Industrial and Commercial Bureau reveals. Chemical pesticide output achieves new peak According to statistics from National Bureau of Statistics of China, the output of chemical pesticides hits record high of 2.49 million tonnes in the first 11 months of 2010, up 20.6% year on year. Among the total, the output in Oct. 2010 is 0.25 million tonnes, up 22.2% year on year. Output of chemical fertilizers sees increase According to statistics from National Bureau of Statistics of China, the output of chemical fertilizers in the first 11 months of 2010 is 61.54 million tonnes, up 4.7% year on year. Among the total, the output in Oct. 2010 is 5.66 million tonnes, up 4.3% year on year. Lier Chemicals 2010 net profit down 23.20% c Lier Chemical Co., Ltd. releases its 2010 financial report on 13 Jan. 2011. The company’s sales revenue is USD69.09 million in 2010, up 15.74% year on year, but its net profit decreases by 23.20% year on year to USD11.77 million. The company revealed that net profit in 2010 is low because it reduced the price of part of its products to enhance sales in the market. Besides, marketing cost of the company witnesses some increase in 2010. CCM International Limited 10 www.cnchemicals.com
  14. 14. Crop Protection China News Vol.5 Issue 1 Jiangsu Yunfan to build new production lines Jiangsu Yunfan Chemical Co., Ltd. plans to build some pesticide production lines in the near future, including 200t/ a fipronil technical, 200t/a glufosinate technical, 200t/a fenamiphos technical, 200t/a bromacil technical, etc. These projects are under Environment Impact Assessment at present. Global market value of biological pesticides to largely increase It is predicted that global market value of biological pesticides will reach about USD2.8 billion around 2015 driven by the large usage growth of biological pesticides in the world, especially in Europe and America. Serious drought attacks North China Serious drought attacks North China on 12 Jan., including nine provinces/regions in this area such as Shandong, Henan, Hebei, etc. There is no rain in Beijing for at least four months and the winter wheat and animals in Beijing have suffered greatly. It is predicted that the drought will carry on in the next ten days. CCM International Limited 11 www.cnchemicals.com
  15. 15. CCM International Limited17th Floor, Huihua Commercial & Trade Building, No.80 Xianlie Zhong RoadGuangzhou, 510070, P.R.ChinaTel:+86-20-37616606Fax:+86-20-37616968E-mail: econtact@cnchemical.comWebsite: www.cnchemicals.com

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