AgroPages-Top 20 Chinese Agrochemical firms: glyphosate taking the lead-Agricultural news

Grace Yuan

Global Marketing Director

Highlights:

- Top 20 Chinese agrochemical firms: glyphosate taking the lead

- Dominant product backing up sales

- Stringent environmental requirement to benefit large companies

For reasons like the rigid demand for agrochemicals at home and abroad, industry restructuring, decreased inventories and the more stringent environmental compliance regulation, Chinese agrochemicals business started to resume in 2012 and market was apparently improved in 2013. According to the list of 2013 top 20 Chinese agrochemicals companies published by AgroPages, the 2013 top 20 achieved total sales of Yuan 47.60 billion, 25% up year on year. Meanwhile the entry level on the list has risen to 1.38 billion from the Yuan 1.21 billion of 2012; nearly 2/3 of the top 20 have achieved growth rate of more than 20%.

Among the AgroPages 2012 top 20, only 1 company achieved sales of over Yuan 3 billion while the top 20 of 2013 shows that the top5 companies all achieved sales of Yuan 3 billion – Zhejiang Wynca Chemical, Zhejiang Jinfanda Biochemical, Huapont-Nutrichem, Sichuan Leshan Fuhua Tongda Agro-chemical Technology and Jiangsu Yangnong Chemical. Of the above Wynca Chemical achieved the No.1 sales with Yuan 3.55 billion, followed by the No.2 Jinfanda Biochemical with Yuan 3.54 billion, No.3 Huapont-Nutrichem with Yuan 3.53 billion and No.4 Fuhua Tongda Agro-chemical Technology with Yuan 3.4 billion. It is noted that the above 4 companies were also on the list of 2013 top 20 published by AgroPages, ranking respectively No.14, No.15, No.16 and No.17.

Top 20 Chinese agrochemical firms: glyphosate taking the lead

As a result of increased demand, stimulated GM crop growth and more stringent environmental compliance requirement, the price of glyphosate continued to go up significantly in 2013, contributive to the much increased sales of the glyphosate-focused enterprises.

The 2013 top 20 shows that 4 out of the top 5 companies are glyphosate principal producers, which are respectively Wynca Chemical, Jinfanda Biochemical, Fuhua Tongda Agro-chemical Technology and Jiangsu Yangnong Chemical. Their sales growth rate has all exceeded 20%, of which Jinfanda Biochemical has the highest growth rate reaching 57.3%. Other glyphosate producers have also achieved significant growth, including Hubei Sanonda, Shandong Rainbow, Nantong Jiangshan and Jiangsu Good Harvest-Weien Agrochemical.

Glyphosate demand will maintain dynamic on a long-term basis, which however requires prudent considerations to be given by producers regarding sustainable development in the future in view of the more stringent environmental compliance regulation, glyphosate crude price floatation, rejection from some South American countries and the continuously emerged issue of glyphosate resistance.

Dominant product backing up sales

One important feature of the 2013 top 20 is that the good performance of competitive product of some enterprises has significantly driven the sales. Taking Jiangsu Yangnong as an example, pyrethriods pesticide is the leading edge of the company and the new releases step by step to the market have greatly increased the sales enabling the company to jump up to the ranking of No.9 in 2013 from the past No.5 in 2012.

The Shandong Luba Chemical which ranks No.18 is one of new entries to the top 20 this year. Due to the pyridine antidumping investigation and the paraquat environmental regulation in 2013, capacity of paraquat was put under strict restriction and the short supply resulted in rise of price up to Yuan 30,000 at the end of 2013 from the Yuan 15,000 at the beginning of the year. Just in 1 year’s time the price has doubled, resulting in a growth of sales volume by above 50%.

For Jiangsu Changqing Chemical, its herbicide represented by fomesafen and insecticide represented by imidacloprid have been in great demand; its 2013 sales reached Yuan 1.56 billion ranking No.17, which are 2 places up over 2012.

The above reveals the importance of key product in the sales of a producer. Accompany, in pursuit of market share, good performance and profitability, needs to shape a competitive product to exhibit brand image and industry influence to enhance its competitive edge.

Stringent environmental compliance regulation in favor of large companies

Although 2013 saw good development of pesticide industry in general, the issue of over capacity still remains unsolved. It will be a future tendency that a higher environmental requirement, phase out of excessive capacity and regulation of market will be implemented in the pesticide industry.

At the end of 2013 Chinese Ministry of Environmental Protection announced an environmental inspection program being carried out on glyphosate / PMIDA enterprises. Furthermore starting from 1st July 2014 paraquat AS registration and production are withdrawn, only export registration of technical product AS is maintained for export purpose; starting from 1st July 2016 the sale and use of paraquat AS in China is terminated. With the governmental policies in place, glyphosate and paraquat have become herbicides of largest growth.

The environmental inspection on glyphosate greatly enhanced the business performance of the listed companies including Wynca Chemical, Jiangshan Chemical and Yangnong Chemical. The change of policy on paraquat production has also greatly escalated the sales of Shandong Luba and Hubei Sanonda. For the long run China’s environmental inspection on glyphosate is surely going to change the structure of glyphosate business toward sustainable development, where competitive producers will survive and elevate their international competitiveness. The inspection carried out this time on glyphosate is a pilot program, which will be implemented in all pesticides in the future to the benefit of healthy development of the industry.

Conclusion

In the global agrochemical market full of competition, it is noted that there are 4 Chinese companies appearing on the list of AgroPages 2013 top 20 global agrochemicals. However Chinese enterprises are still falling behind in terms of technical level, product range, service and management. Chinese companies should see clearly tendency of world market and seize the opportunity of policies in place to enhance growth toward globalized development.