Apr. 1, 2014
Successful Restructuring Enabling Growth Despite of the Declined Market
In 2012 the national economy growth slowed down, the real economy especially the manufacture industry suffered serious impact. Under such a great pressure, Red Sun managed to operate its business as normal and even achieved increased sales via innovative and transformative efforts. The pesticide sales of the Company in 2012 reached Yuan 2.72 billion, 112.6% up YOY; and gross margin increased by 6.1% YOY, ranking No.4 among the AgroPages’ Top 20 Pesticides Companies of 2012. In 2013 Red Sun continued its strategic deployment of the 3 environment-friendly pesticide series, which once again brings grown business chains in addition to the growth of volume of sales. From January to September 2013, Red Sun achieved sales of Yuan 2.08 billion, 3.67% up YOY.
Pesticides Sold all over the World
Since the start of direct export on its own, Red Sun has made a breakthrough in achieving thousands of permits granted by hundreds of countries across 5 continents in the world. In some countries, Red Sun is the only Chinese pesticide enterprise obtaining registrations, which have opened up a green channel for its products of independent intellectual property to enter the world market.
In the meantime Red Sun has successfully cooperated with the first-tier and second-tier global agrochemical clients, forming a so-called “100-country & 1000-client sales network” which covers thousands of direct clients and top 10 dealers of major agricultural countries, having enabled the landing of its products in nearly 100 countries across the world. So far Red Sun’s overseas market has covered the main agricultural countries and regions in North America, South America, Central America, Southeast Asia, Europe and Africa, including US, Brazil, Argentina, Venezuela, Mexico, Australia, Thailand, Malaysia, Russia, Ukraine and Nigeria.
In the years ahead, Red Sun is prepared to establish a complete international pesticide industry chain via vertical integration so as to cooperate with 5 to 8 downstream enterprises in agricultural regions of South America, Australia, Europe, Africa and Southeast Asia toward localization of market, people and sales network. Through these initiatives, Red Sun will be able to transform its business mode from volume-based growth to quality-based growth, from domestic market-based sales to international market-based sales, from knock-off innovation to innovation of independent intellectual property to achieve a qualitative change over the past quantitative change to reach the Company’s goal of “growth with quality.”
Exclusive Competitive Edge
It is not by chance that Red Sun could achieve its business growth, which is a reflection of its effort on transformation and enhancement to competiveness; therefore it is a natural outcome to achieve continued growth. At present the competitive edge of Red Sun is best reflected by the following:
Complete Industry Chain Advantage: via integration of brand, technology, sales channel and human resources, the Company possesses 3 complete and advantageous industry chains - pyrethroid insecticides, pyridine-based agrochemicals and HCN-based agrochemicals which cover businesses of upstream raw material, production, processing and marketing.
Technical Advantage: via technical innovation, the Company has developed over 100 national novel products of independent intellectual property, as supported by the well-established research platform and innovation mechanism based upon national and local labs covering product development and process innovation.
Marketing Advantage: via marketing innovation, the Company takes the lead in establishment of a new agricultural material chain in Chinese market; in overseas market products are sold to nearly 100 countries and regions worldwide, having formed an international sales network covering thousands of clients.
Brand Advantage: via brand innovation, the Company wins brand images such as China Top Brand, China Well-known Trademark, etc.
The first-presence courage might be already rooted in the heart of a dozen employees of Red Sun headed by Chairman Yang Shouhai back in the 80’s of last century. During the 20 years’ development, it is this kind of spirit of Red Sun that has created a lot of legendary stories.
• Pyridine Industry Chain
During end of last century, Red Sun successfully developed pyridine, which had been monopolized by multinationals for more than 50 years. This achievement has enabled the Company to become the world’s first full industry chain-covered enterprise, which owns the 4th generation of heterocyclic environment-friendly pesticide technology covering pyridine, paraquat and diquat; this has changed the world production and marketing situation of environment-friendly pesticides.
Pyridine is called the “chip” of heterocyclic pesticides, pharmaceuticals and veterinaries, being widely applied to productions of pesticides, pharmaceuticals, household chemicals, food and forage additives. Pyridine can be used to produce some 40 kinds of pesticides for replacements of high-toxic and hazardous pesticides, such as paraquat, diquat, haloxyfop-P-methyl, chlorpyrifos, imidacloprid, chlorfluazuron, etc. These environment-friendly pesticides play an important role in agricultural development in developing countries, which directly affects the food production in these countries. For example, the paraquat produced in China has captured above 80% market share in Southeast Asian market. In the meantime China is increasing supply of environment-friendly pesticide to major agricultural countries in Africa and South America to enhance strategic cooperation with these countries. Pyridine-represented Chinese environment-friendly pesticide has gradually entered the high-end market in developed countries which are mostly monopolized by multinationals.
According to a forecast, pyridine pesticide demand will increase by 15% in the several years ahead, which is higher than the average growth of the industry. In the future Red Sun is prepared to continue to utilize its advantages of cost, technology, environment-friendly nature and excusive competitive edge brought by the complete pyridine industry chain; chlorination and fluorination technology on pyridine will be used to further develop the heterocyclic products of the pyridine base chain and to extend product chain to form the product tree so as to elevate the marginal profit of the Company.
• Successful Pyridine Anti-dumping Case
On the 2 August 2012, Red Sun took the lead to lodge an application on behalf of Chinese pyridine producers to Chinese Ministry of Commerce requesting an anti-dumping investigation into the imported pyridine from Japan and India. In November 2013, Chinese Ministry of Commerce gave a verdict that the imported pyridine originated from Japan and India constituted dumping, to which anti-dumping duty will be imposed by 24.6% to 57.4% from Nov. 21st 2013 for 5 years.
This is the first anti-dumping case in Chinese pesticide industry, which is lodged by Red Sun, being China’s 73th successful anti-dumping case. Although the amount involved is not big, there is a great significance to the industry. Red Sun’s effort helped to establish its brand image and played a good foundation for future development. The benefit of the anti-dumping case is reflected by the following 3 aspects: a) the anti-dumping investigation regulated the industry development and helped to maintain healthy pyridine development in China; b) pyridine industry is a key industry supported by the national policies, which is of great significance to downstream derivative industries, as well as to the pesticide export; c) anti-dumping investigation is of important significance to the safeguard of domestic intellectual property rights of pyridine production technology, and consistent with the public interest of the country.
• A New Life to Paraquat
Paraquat is the world 2nd largest herbicide, which has irreplaceable advantages of killing weed but without activation of plant root and soil. However due to China’s special agricultural feature, which is based upon small scale growing different from developed countries where farming is done on large scale with professional pest control measures, as well as due to lower education of Chinese rural people, there have been occurrences of accident caused by misuse of paraquat, like wrong intake, poisoning and suicide. In April 2012, Chinese government announced prohibition of paraquat AS in effect from 1 July 2016. As a paraquat leader, Red Sun has responded positively to the new policy by establishing a Chinese Paraquat Social Responsibility Work Team together with the setup of Paraquat Social Responsibility Foundation. Moreover Red Sun has increased its input into development of new formulations, resulting in the full registration of the paraquat 20% GW in 2013, which brings new vitality to paraquat.
Future Strategic Plan of Red Sun Group
Objective of Development: Red Sun Group is positioned via transformation process to become a “double-core” high-tech oriented and China’s top 10 leading groups focusing on life science and new environmental material covering complete industry chain including research, advanced manufacture, modern farming, service trade, domestic and international marketing.
Industry Positioning: a) advanced manufacture covering 3 major industries – environment-friendly pesticide, intermediates and ecological fertilizer; animal byproducts; green materials. b) modern service trade covering 4 major industries – chains business operation of agricultural production material, pharmaceuticals, selenium-rich and local famous farm products; foreign trade of agricultural production material, pharmaceuticals, famous farm product and new materials; urban-rural coordinated development; financing and investment. c) high-efficient modern farming.
Red Sun wishes to strive to become not only a global quality product supplier but also an integrated global agro service, information service and technical solution provider.
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