By Think Real - On 12 Nov., 2016, Jiangsu Yangnong Chemical Co., Ltd. (Jiangsu Yangnong) published a notice clarifying the press’ prediction on its dicamba capacity.
Jiangsu Yangnong said that dicamba is a main herbicide of its and its controlling subsidiary, Jiangsu Youjia Plant Protection Co., Ltd. (Jiangsu Youjia), has 5,000t/a capacity for the product, which is under normal operation currently.
In 2015, the company got a revenue of USD177.6 million from its herbicide business, which accounted for 39.1% of its total; the comprehensive gross margin of the business was 25.5%; the revenue from dicamba was USD79.6 million, taking up 17.5% of the company’s total. In the first three quarters of 2016, the revenue from the herbicide business went down slightly year on year and the prices of its products fluctuated to some extent.
Jiangsu Yangnong revealed that another 20,000t/a dicamba project of Jiangsu Youjia is under construction, which is predicted to be launched in 2017. The specific launch time is dependent on the installation progress, operation & commissioning and safe & environmental protection check results.
Though deeming the market prospect of dicamba, the company thinks that the product has to face big uncertainty.
1. The demand for dicamba is dependent on the planting and promotion areas of GM crops as well as the promotion speed, and the product’s weeding effect is uncertain to some specific GM crop varieties.
2. Currently, BASF, Jiangsu Changqing Agrochemical Co., Ltd. and Zhejiang Shenghua Biok Biology Co., Ltd. have also produced dibamba, so it is uncertain if the demand change of GM crop will benefit the company’s future performance.
3. In the future, new capacity may appear in the dicamba market and there is uncertainty in the supply and demand relationship of the product and its price change.
4. With improvement in the crop technologies, the application technologies of dicamba may be substituted.