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Agrochemical Industry in China: From Self-reliance to Export to Discovery & Developmentqrcode

Feb. 20, 2020

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Feb. 20, 2020
Co-authored by Sridhar Iyer*, Larry Liu, Bhavini Tailor & Sumit Tiwari
*corresponding author (email address: sridhar.iyer@jrfonline.com & sridh_74@yahoo.com )
Introduction:
 
Like the history of pesticides1, China also went through its share of using Natural Pesticides, Inorganic Synthetic Pesticides & then later Organic Synthetic pesticides in a chronological fashion. There is a suggestion that till 1970 Natural Pesticides were largely used while between 1970 to 1980 there was the use of Inorganic pesticides followed by Organic pesticides from 19802
 
As expected, China moved from self-reliance in pesticides through its manufacturing to gaining expertise in manufacturing leading to an increase in export. The actual growth story of the Chinese Pesticide Industry probably started in the 1990s3. As of now China is a leading producer of pesticides and a leading exporter of the pesticides [Annual Output = 3.7 M tons & likely around half of it is exported]3
 
In this journey, it has been aided by strong policies, putting the right infrastructure and creating the right incentives for manufacturers to export. From a well-written article4 we can summarise the following points: 
 
1996: Articulated a white paper on policy for grain self-sufficiency

2003: Grain area dipped in spite of the policies and mainly attributed to the subsidies not reaching the farmers (distributors benefitted from the subsidies) 

2004-2006: Another policy document by the government to support the agricultural sector whereby a direct subsidy to farmers was introduced along with phasing out the agricultural taxes. This move particularly seemed to have helped the farmers economically and hence they started to use pesticides more than before. The flip side was that many substandard pesticides were rampant in local market during this time as the internal demand for pesticide increased.

2004 also saw that the government proactively encouraging exports of pesticides (for 48 products VAT was removed and 11% export tax rebate was also put into place). Incidentally, this coincided with glyphosate patent expiry and the Chinese Agrochemical companies increased their export of glyphosate exponentially between 2004 to 2008.

2008: Economic recession had an impact on Chinese Agrochemical exports. The government started multiple changes to tax rebate as a counter-strategy. Seventy-five (75) pesticides underwent cancellation of export tax rebate (but glyphosate was not touched!). Then, the government changed track and raised tax rebate for certain pesticides like acaricide dicofol, carbofuran, bio-pesticides, acaricide aramite, chlorethoxyfors and glyphosate to name a few important ones. 

2010: Partial recovery of the agrochemical industry from the Economic recession.

2012: State policy to encourage certain combination products resulting in the increase of wheat production and also pesticide manufacturing. This was largely aimed at increasing the productivity of domestic farmers.

2014: China starts initiating policies on “Environmental Protection & Modern Initiatives” which included efficient pest management systems, phasing out of toxic pesticides in favour of biopesticides, water pollution control & certain industrial areas like Lianyungang, Nantong, Yancheng Jiangsu Province were being closed in a stepwise manner. This had an effect of a decline in pesticide output in the years 2017-18. 

2015: China initiates a process of merging state-owned enterprises to reduce the number to increase efficiency. These newly merged companies would be the “National Champions” for Chinese Agrochemical Industry. Among them, the most important was Chem China which in 2017 acquired Israel’s Adama Agricultural Solutions and Syngenta AG, thereby immediately becoming a global player.

Further, the China Pesticide Industry Association (CCPIA) started advising the Industry for example in 2018 CCPIA forecasted a number of pesticides that might be in demand in China for that year ( glyphosate, acetochlor, atrazine, butachlor, carbendazim, chlorothalonil, copper(II) sulfate, dichlorvos, thiosultap-disodium, and trichlorfon). These types of pointers might help the local manufacturers in making the yearly plan.
 
There is an interesting article in PNAS5 by research groups from the Universities of Melbourne, Zhejiang, Fudan, Wuhan and Stanford wherein there was an interesting co-relation found between the small farm sizes in China and the overuse of agrochemicals. The farm sizes which were supposed to increase with economic development was not observed in China due to national policies. The authors recommend incentives to increase the farm size which according to them, will reduce the use of agrochemicals, decrease harmful environmental effects and also increase rural income.
 
Discovery & Development:

The process of encouraging the discovery of new agrochemicals in China started around 1993 when a new patent system was introduced3. While it is difficult to summarise the discovery process in China chronologically in this article, suffice to say that China slowly but steadily started this again with the help of state-sponsored research institutes/universities and the industrial counterparts collaborating together (academia-industry collaboration). While most of the industry involved were local (Chinese), this is a good example of how academia-industry collaboration can bear fruits-a topic many of the developing countries do not address well. The pattern seems to be that the basic research was done at the institutes/universities (probably funded by industry) and once there were promising results, the industry would then take over at either Lead Optimization and/or selection of the new agrochemical, followed by the necessary regulatory studies, manufacturing, registration and the commercial part. Some of the representative examples of these as mentioned in the references3,6 and are shown in Figures 1 to 4. These are randomly chosen just to give representative examples. Thus, the new molecule ZJ0273 was jointly developed by Shanghai Institute of Organic Chemistry & Shandong Qiaochang Chemical Co. Ltd. Flumorph developed by Shenyang Research Institute has been commercialised both as combination products and different formulations by many companies like Shenyang Sciencreat Chemicals Co., Ltd. (Sciencreat), Jiangxi Vegcides Biotechnology Co., Ltd., Jiangxi Haikuolisi Biotechnology Co., Ltd., Hailir Pesticides and Chemicals Group and Shandong Audis Bio-Tech Co., Ltd.7. Flumorph is a very simple variation of dimethomorph (-F instead of -Cl) which was discovered in 1983 by Shell Research and further marketed by Shell, American Cyanamid & BASF8. SYP-Z071 and SYP-1620 are two new strobilurin fungicides that were discovered and registered by Shenyang Research Institute. One can see the structural similarities between the naturally occurring fungicides (Strobilurin A and Oudemansin A) and these molecules. Also, to get a perspective the structure of the most important strobilurin Azoxystrobin is shown (Figure 1).
 
Figure 1
 
Similarly, as shown in Figure 2, Jiangsu Pesticides Research Institute Co. Ltd. & Dalian Raiser Pesticides Co. Ltd. developed two pesticides Fufenozide & butylene fipronil both variations from the known pesticides tebufenozide & fipronil.
Figure 2
 
Another interesting academia-industry collaboration is shown in Figure 3. The Institute of Chemistry in Central China Normal University developed pesticides with Jiangsu Sevencontinent Green Chemical Ltd., Beijing Yoloo Bio-Technology Ltd. and Shandong Cynda Chemical Ltd. respectively.
 
Figure 3
 
Some other representative examples are shown in Figure 4, where structures of three new pesticides developed by Sino-Agri, Shenyang Sinochem Agrochemicals & Hunan Research Institute of Chemical Industry respectively are shown. Thus, Fluopimomide developed by Sino-Agri9 is a non-fumigant nematicide having roots in another such structure i.e. Fluopyram which was developed by Bayer earlier. A novel acaricide based on pyrazolyl acrylonitrile derivatives (SYP-9625) has been developed by Sinochem Agrochemicals10. Further, Brochlorfenapyr (HNPC-A3061) has been developed by Hunan Research Institute and has its roots in Chlorfenapyr which was developed by BASF in the past.
Figure 4
 
 
In conclusion, Chinese Agrochemicals moved from self-reliance to export and has now ventured into discovery. While the manufacturing capabilities have developed over several decades and has helped China in production of pesticides, new laws are slowly coming in to look into the sustainability part. With respect to discovery we see the following salient features: 
 
Academia-industry collaboration
 
Mostly small changes in already developed molecule & a pharma “me-too” based approach so far (there could be a different connotation with respect to the meaning of the word “me-too” in pharma & agrochemicals, and hence specifically we have used the word in a pharma context), however some novel structures are emerging
 
Mostly for Chinese registration although the patent is sought globally for the new chemical entities in agrochemicals
 
Future of discovery looks bright since not only state-sponsored Institutes are involved but the industry and academia in China have skilled scientists in Synthetic/Medicinal chemistry area with wide range of expertise in both pharma & agrochemicals. The agrochemical research is increasingly looking like pharma research in its Discovery stage with several concepts being experimented from pharma discovery side by the agrochemical discovery teams. This means that China’s strength in pharma R&D should be easily transferable to agrochemical research as well. This exchange should only strengthen the agrochemical discovery research in China.

 
 
 
 
 









References:
1) E. L. Taylor, A. G. Holley & M. Kirk 2007 Pesticide Development – A Brief Look at the History. Available: https://sref.info/resources/publications/pesticide-development---a-brief-look-at-the-history
2) https://www.theseus.fi/bitstream/handle/10024/139893/Zhenning_Shi.pdf?sequence=1
3) P. Xing-lu, D. Feng-shou, W. Xiao-hu, X. Jun, L. Xin-gang, Z. Yong-quan Journal of Integrative Agriculture 2019, 18(4), 840–853
4) https://www.chinaag.org/2018/08/03/pesticide-powerhouse-a-complete-guide-to-chinas-rapid-rise-to-global-agrochemical-dominance/
5) Y. Wu, X. Xi, X. Tang, D. Luo, B. Gu, S. K. Lam, P. M. Vitousek and D. Chen PNAS 2018, 115 (27), 7010-7015
6) http://news.agropages.com/News/NewsDetail---19982.htm
7) http://news.agropages.com/News/NewsDetail---27777.htm
8) https://onlinelibrary.wiley.com/doi/abs/10.1002/047126363X.agr097
9) http://news.agropages.com/News/NewsDetail---33093.htm
10) http://www.sysard.com/enarticle-323.html

About the authors:
  Sridhar Iyer, Ph.D., MBA, is Dy. Director & Global Head-Business Development at Jai Research Foundation-a preclinical CRO based in India. Prior to this he worked as a scientist (Synthesis/Medicinal Chemistry) at various organizations like Albany Molecular Research, Hyderabad, GVK Biosciences and Orchid Pharma. He has a Ph.D. from IIT, Bombay and did his postdoctoral research from ICSN, CNRS, Gif-sur-Yvette, France. He has also completed his full-time MBA from Audencia Business School, Nantes, France.
  Larry Liu, B.Horticulture is General Manager of Winhonor Consulting Company Limited. This is a company offering pesticide Studies Service and Registration Service.
  Bhavini Tailor, B. Com., MCM is Assistant Manager – Business Development at Jai Research Foundation - a preclinical CRO based in India. She is in charge of all activities related to Digital Marketing, Campaign management and Brand Marketing. She also has additional responsibility for Business Development in the APAC region.
  Sumit Tivari, B. Pharm., MBA is Sr. Executive - Business Development at Jai Research Foundation-a preclinical CRO based in India. He is responsible for the Business Development activities of APAC region.





























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