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Government purchasing excited but hard to involve for most pesticide enterprises

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The large subsidy of government purchase has stimulated lots of domestic pesticide enterprises to get involved in the bid inviting.

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Government purchasing excited but hard to involve for most pesticide enterprises

  1. 1. Government Purchasing: Excited but Hard to Involve for Most Pesticide EnterprisesSummary: The large subsidy of government purchase has stimulated lots of domesticpesticide enterprises to get involved in the bid inviting.Tags: pesticide, fertilizer, agricultural, pesticide enterprise, pesticide production, winter wheatSince the Ministry of Agriculture of China (MOA) released the agricultural subsidy policy on 6April, 2012, USD253.16 million (RMB1.6 billion) of subsidy has been allocated to 11 winter wheatplanting provinces and areas in China to subsidize peasants use of pesticides and foliar-fertilizeron winter wheat, with total planting area reaching 21.33 million ha., based on CCM International’slatest issue of Crop Protection China News.The main reason for allocating such large amount of subsidy by the MOA in just two months is toensure the high and stable yield of the winter wheat this year.Although the subsidy seems to be a tip of the iceberg of Chinese Governments agriculturalbudget made at the beginning of 2012, over USD194.41 billion, it is still a big cake for domesticpesticide enterprises.Driven by the large profit in the subsidy, many domestic pesticide enterprises scrambled for thebid inviting of local governments. Some pesticide enterprises in other provinces and areas evenmade great effort to go cross-regional bid."We have paid great attention to the dynamic of government purchasing. We set the goal ofachieving an order worth USD12.66 million when we got the information that the HenanGovernment was planning a government purchasing of USD63.29 million. Aiming to get theorder, we set up a special team to prepare all the documents needed in the bid and tried our bestto make all the procedures right," said a manager from Guoguang Agro-Chemical Co., Ltd., alarge pesticide enterprise located in Sichuan Province.However, even if enterprises are very excited about government purchasing and put a lot ofenthusiasm on it, many of them still cant get involved, even for some large pesticide enterprises.Owing to the cumbersome procedures of the bid inviting, lots of pesticide enterprises lack theexperiences of preparing bid materials. As many pesticide enterprises located in different
  2. 2. provinces went to other provinces for the bid inviting, they were forced to give up when they foundthat it was impossible to fetch the materials needed in a short time.In addition to the cumbersome procedures and lots of bid materials needed, the high thresholdset by local governments was also a big threat to the pesticide enterprises who want to gain thebid inviting, especially those medium and small sized ones.Take the threshold of the bid inviting of pesticide purchasing by governments in ShandongProvince and Henan Province for example. The two provinces invited public bidding by county-level authorities.Suppliers should be independent legal entity with registered capital no less than USD1.58 million.Owing pesticide production license, pesticide registered license and product standard certificationshould be one of the main requirements and all these licenses should be valid. Pesticide productsshould get registered on wheat. Enterprises should issue qualification test report of providedproducts. Enterprises should own the quality control lab and five years of production experienceof related products. And the capacity of the related products should exceed 1,000t/a.Some provinces which invited public bidding by provincial authorities only allowed large andfamous pesticide enterprises to participate.Facing the high threshold set by governments, small-sized pesticide enterprises have to find theirown ways to attend the bid. Aiming to meet the requirements, many small enterprises choose toco-found pesticide enterprises with manufacturers, large pesticide dealers, etc. Forming coalitionbidder with qualified enterprises also can help them to participate.As Chinese governments focus on the governments purchasing of pesticides increases year byyear, domestic pesticide enterprises start to realize the importance of anticipating and achievingthe bid inviting. It not only provides great profit but also a good marketing measure for acompanys products due to the governments credibility. However, different from normalmarketing channels, government purchasing seems to be a tough task for most of domesticpesticide enterprises. How to overcome the problems of less experience in dealing withgovernments, knowing well all the cumbersome procedures during government purchasing is nowbecome the first puzzle for most domestic enterprises to solve.Source: Crop Protection China News 1212http://www.cnchemicals.com/Newsletter/NewsletterDetail_16.html
  3. 3. Content of Crop Protection China News 1212:Government purchasing: excited but hard to involve for most pesticide enterprisesGlyphosate price rises against market trendLarge area in China attacked by droughtFull implementation of new pesticide policy in Hainan postponed againMIIT releases new policy for renewal of pesticide production licensesZhejiang Wynca to set foot in seed industryShandong Dacheng ready for being backdoor listedJiangsu Kuaida to largely expand phosgene capacityJiangsu Lanfeng puts some new projects into productionCrop Protection China News, a semimonthly publication issued by CCM International on 15thand 30th(31st) of every month, aims to gain a deep insight into Chinese market, supply the latestmarket data and strategy support, analyze the newest legislation and policy and grasp the futuremarket trend.About CCMCCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff ofmore than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis,Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its newproprietary product ValoTracer.For more information, please visit http://www.cnchemicals.com.CCM International Ltd.Guangzhou CCM Information Science & Technology Co., Ltd.17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou510070, ChinaTel: 86-20-37616606Email: econtact@cnchemicals.comSource: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1129.html

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