On 27th and 28th August, 2020, during the coronavirus pandemic, the 2020 China Pesticide Exporting Workshop (2020CPEW), which has been a focus of attention by the industry, was held successfully in Hangzhou, China. Although the participation of overseas industry members was physically blocked, local Chinese agrochemical practitioners attended the event with great passion and enthusiasm. The event was organized by AgroPages and sponsored exclusively by Qilu Pharmaceutical (Inner Mongolia) Co., Ltd, with the participation of over 500 individuals from 230 companies and foreign business representation offices or their branches in China.
Globally, the demand for food is increasing constantly while the effects of diseases, insect pests and weeds caused by abnormal climate conditions are increasing. GMO crops are developing continually, and the coronavirus pandemic in the first half of 2020 has affected the global economy. These factors have posed both new challenges and new opportunities for the formation of a new global pesticide industry.
During the workshop, 23 local and international keynote speakers who are industry practitioners shared their thoughts and ideas with the event’s participants on the latest industry development trends related to export data, updated policies, industry status, and overviews of agrochemical markets in various regions, as well as product registration processes.
Dr. Huang Kexue of Qilu Pharmaceutical (Inner Mongolia) Co., Ltd, the sponsor of the workshop, said, in the opening address, that in 2018, global sales of spinosad exceeded $300 million, and it is estimated that sales of the spinosad series (spinosad + spinetoram) will reach $1.2 billion by 2025. With the launch of the company’s Hulun Buir base in Inner Mongolia, Qilu Pharmaceutical’s spinosad production capacity will reach over 1,500 tons, ranking first in the world.
Although the pandemic has affected both import and export trade in the first half of the year, the import and export of pesticides have not been too seriously impacted. Wu Houbin (Division Chief of ICAMA of the Chinese Ministry of Agriculture and Rural Affairs) pointed out that the export volume and export value of pesticides in the first half of the year increased by 4.1% and 4.3%, respectively. Among them, the export volume and export value of fungicides increased by 10.2% and 12.9%, respectively, which were remarkable increases. In terms of export product varieties, glyphosate played an key role in export growth, and its export value reached $605 million, an increase of 12.8%, which was much higher compared to paraquat ($146 million, an increase of 4.5%), followed by imidacloprid, clethodim, emamectin benzoate and mesotrione.
Chemical industry parks in China are important operations centers of the petrochemical industry, and their importance is gradually becoming more prominent. Yang Guangliang, a professor-level senior engineer at China National Petroleum and Chemical Planning Institute, gave a brief introduction to chemical industry parks and explained the topics of industry transfer, industrial distribution and capacity development status in key agrochemical regions. By the end of 2018, there were, in total, 676 industrial parks focusing on petroleum and chemical industry-oriented productions, which include 57 national-level chemical parks (inclusive of economic and high-tech zones), 351 provincial-level chemical parks and 268 municipal-level chemical parks.
In recent years, industry transfers from Zhejiang and Hebei provinces have been very evident. The destinations of the transfer of production of pesticide and intermediates are mainly Inner Mongolia and Ningxia, followed by Gansu, Shaanxi and Hubei.
Concerning the agrochemical industry in China and India, Wu Di (Research Manager of CICC) reviewed, in his report, the global crop protection industry and China’s pesticide market development. Pesticide output has continued to decrease over the last five years, having moved into a stage based upon stock supplies. In 2018, China's GMO planting area was only 2.9 million hectares, which is about 4% of the equivalent area in the US. GMO crops have considerable development opportunities in China.
Akhil Agarwal (Vice President at Ernst & Young), Jignesh Shah (Associate Partner at Ernst & Young) and Ravikiran R. Chaudhari (Procurement Director of UPL in China) shared their operations experiences in the Indian market. In the past five to six years, many mergers and acquisitions have taken place in India, revealing the business potential of the market.
Agarwal and Shah said that the Indian government is expected to facilitate the registration and production of technicals, as well as the production of formulations in India, via the “Make in India” initiative. Ravikiran also highlighted India's pesticide prohibition and pesticide registration regulations, noting that India has become a net exporter of chemicals. In the 2019-2020 fiscal year, exports increased by 3% while imports decreased by 7%, with exports being larger than imports.
The Covid-19 crisis has clearly impacted the global food transformation and food system, so international trade in food is critical to supplying food to global populations. In his presentation, Hartmut van Lengerich (Global Head of Crop Protection Asset Management, Crop Science Division of Bayer) gave an overview of the policies, innovation and cooperation that are significant to building a resilient food system. He stated that Bayer is dedicated to adopting new standards in support of the sustainable development of agriculture, where crop protection, seed, trait and digital farming are combined and delivered by Bayer’s tailored solutions for farmers.
The Brazilian market has attracted the attention of many Chinese agrochemical companies. What is the latest market and policy dynamics in the region? How do Chinese suppliers establish businesses with Brazilian companies while utilizing their respective advantages to serve the Brazilian market?
Ihara is a Japanese platform that serves Brazilian farmers, developed in close partnership with Chinese manufacturers. Among Brazil’s distribution system, dealers represent 42%, direct sales represent 32%, and cooperatives represent 25%. Andre Nannetti (Marketing Director of Ihara) emphasized the importance of sales channels, which is the first critical step to delivering products to farmers.
Via the acquisition of Tundra, now known as Acrom, Beijing Beta Chemicals consolidated the advantages of both companies and entered the Brazilian market, backed up by Tundra’s patented glyphosate SP Gliforte. Andre del Giudice Santos (Tundra’s General Manager) explained the details of Brazil’s competition structure and market access situation, and gave reminders on several key issues of concern. He Jinghua (General Manager of Beta Chemicals) presented Beta Chemicals’ development history in Brazil and the advantages it offers to clients, stressing that Gliforte was one of the reasons for Beta Chemicals’ acquisition of Tundra. Gliforte is an environment-friendly product, which complies with future environmental regulation requirements. Its future market potential will provide dealers and users with good profit margins.
At present, a large number of mergers and acquisitions are going on in Brazil’s distribution sector. Renato Seraphim (CEO of AGRO100) conducted an in-depth analysis of the Brazilian market, suggesting how Brazil can be accessed through dealers despite the challenges they face. He said that 49% of Brazil’s market is under the control of dealers, which are roughly 6,000 companies. Renato believes that mergers and acquisitions will teach dealers the professionalism they are lacking. Furthermore, he also mentioned two types of future trends related to dealers. The first are large-scale distributors and cooperatives, who are strong in terms of size, channels, management and risk control, while the other are specialists, which are small and medium-sized distributors run by their owner who are well-connected to clients and flexible in terms of team management with credits and loans under control. If a major company wants to develop faster in Brazil, its choice will be large-scale distributor. If higher demand and better loyalty are expected from the market, experts or small and medium-sized distributors can be employed to access it.
Dean Hendrickson (Vice President of Marketing and Business Development at CHS Inc.) and Charles Baron (FBN Co-Founder) shared information on the US market. Dean gave an overview of the US crop protection market, distribution channels, off-patent products and future market opportunities, stating that the big four, which are BASF, Bayer, Corteva and Syngenta, represent 64% of the US crop protection market. Therefore, going forward, Chinese manufacturers need to figure out how to compete with the big four. He also specifically analysed the future of the active ingredients, dicamba and glufosinate, in the US market, suggesting that Chinese exporters should consider bringing key active ingredients into their product portfolios, which is critical to their success. The US distribution channel is highly centralized, so consolidation will still accelerate going forward and Chinese manufacturers should create partnerships with prime retailers.
FBN created a new distribution and service model based on big data. Baron said that FBN is an e-business platform that provides farmers with information, tools, support and recommendations to help them procure agricultural inputs and products. The platform has 12,300 loyal member farms in the US and Canada, covering 40 million acres of land in North America, as well as 16 million acres of member farms in Australia, which is FBN’s new market. On the FBN platform, farmers are able to access sales channels at various levels, to directly reach partner manufacturers via the FBN Direct and F2F Genetics Network for purchasing agricultural inputs at transparent prices, which will help farmers save considerable amounts of money.
The rapid growth of the Russian and East European markets is remarkable. Bursevich Veranika (Business Development Director of Peters and Burg Agrochemical Holding, Hungary) shared information on Russia’s crop protection market and biopesticide development. The agricultural intensification in Russia’s western regions and the growth of arable area in its eastern parts are drivers to growing demand and the consumption of pesticides. In 2019, the Russian pesticide market grew by 30%. Imports of pesticides in Russia account for 50% to 60%, which is still growing at the rate of 8% to 10%. In terms of import, over 90% of active ingredients come from China.
Olena Guz (Regulation Expert at Polgar ACRO) gave a presentation on the pesticide product registration process in Georgia and Kazakhstan, which are two markets that are familiar to Chinese manufacturers. Guz detailed the documentation and research required for product registration, as well as details related to registration administrations, which will enable interested companies to attain a basic understanding of the registration requirements in these two countries.
At the workshop, several Chinese pesticide companies with distinctive business features were invited to present their business development experiences. These companies have their different values but share a common core value, which enabled them to establish themselves as an iconic company in their sectors. The discussions that took place between companies’ top management and the workshop’s participants led the event to its climax.
Zou Feng (Deputy General Manager of Limin Chemical) introduced the future business strategy of Limin Chemical, which currently has four production bases. EBDCs is an important business segment of the company that has a promising future, valued at a $800 million to $1 billion.
As a leading formulation research and development company in China, Mindleader achieved a capital increase in Pilarquim and brand consolidation, by promoting its formulated products in several hot international market using Pilarquim’s channels. Meanwhile, Pilarquim’s brand image is gradually being reshaped to perfection. Mu Canxian (Board Chairman of Mindleader/Pilarquim) delivered a speech on the company’s brand positioning, quality management, innovation and breakthroughs, as well as on its overseas product development strategy.
Quality management is one of the core corporate value of Mindleader, which adheres to its philosophy of “good and stable quality of raw materials and auxiliary materials,” whilst its production equipment are world-class. In terms of product applications, customer specifications are included in production standards beyond the specifications mentioned earlier, to provide customers with precision services. All these factors and elements make up the Pilarquim brand. Innovation brings added value to customers and enables them to choose the right product repeatedly without hesitation. Mindleader’s innovations and breakthroughs are best reflected in its product formulations. In particular, the successful development and application of the microcapsule, SC, based on several core compounds enabled the final product to have higher suspensibility and stronger persistence, which reduces environmental toxicity and required amount of use. By 2023, Mindleader plans to launch over 20 microcapsule products in Chinese market, and us prepared to release various products in the global market, as part of its differentiated product strategy to create value for customers.
Rainbow is a leading company in the Chinese pesticide industry with a proactive strategy and a distinctive operations and management mechanism, as well as an abundant corporate culture, which are all highly regarded within the industry. Wang Wencai (Board Chairman of Rainbow Agro) was invited to make a speech at the workshop. In his speech, Wang reviewed the development of Rainbow, stating that a Chinese company decides its development direction according to its own resources and specific conditions. He also deeply analysed his personal way of thinking and style of leadership in terms of the business development of the company.
Rainbow was founded in 2000 during the era of China’s global factory development, when the Chinese pesticide industry underwent a phase when “production was king.” Since then, Rainbow has grown up starting from a pesticide technical manufacturer. In 2008, Wang felt a sense of crisis. At this time, Rainbow began its next stage development planning with its global registration program. Beginning from its first overseas registration in Argentina up to its first overseas client, Rainbow began to cooperate with multinationals in Argentina and Australia in product registration and authorization, positioning itself as a service provider and establishing a platform for the purpose of rapid market access. However, its experience in Argentina cannot be simply duplicated in other markets. Some countries have lower registration requirements and registration certificates are not essential. Accordingly, Rainbow developed an independent brand via its B2C operations.
At the workshop, Wang shared the brand’s experience in overseas markets and told the company’s total failure in Indonesia as a lesson to illustrate the difficulties involved in overseas brand development. Speaking about development planning, Wang stressed that planning must be implemented as a specific strategy that must be split over different years, from this year to next year and the year after. Rainbow is good at clearly specifying key tasks and measures to achieve its goals, Wang said, adding that the maximum value of planning is enabling staff to stay focused on work and not to seize an opportunity. One needs to firstly see a clear direction and ascertain if it is worth doing, and must then calm down to plan and implement the required work step by step.
At the later question and answer session, Hu Yong (General Manager of Ningbo Generic Chemical) and Wang took the stage to interact with participants, who asked a series of questions related to promoting Chinese pesticides in overseas markets, US market planning, overseas acquisitions and overseas team building. They answered all questions and many open ideas, lending to the warm discussions at the workshop.
After one and a half day market information exchange, a registration seminar sponsored by REACH24H was held on the afternoon of 28th August, which was the first platform in China for marketing and registration personnel to exchange their views on marketing and registration practices.
Fu Guiping (Deputy Division Chief of ICAMA of the Chinese Ministry of Agriculture and Rural Affairs) explained the new pesticide registration requirements and policies in China. Using large numbers of first-hand information and the latest data, Fu explained the current registration policies of ICAMA that aim to help pesticide companies understand the latest requirements, enabling those wishing to register to adapt accordingly. During the workshop, Fu provided companies with recommended counter measures to cope with the new situation.
Chen Xiaolan and Tian Ting (Senior Regulatory Compliance and Technical Expert at REACH24H) highlighted the registration standrads in the US and EU markets, covering the crop market and pesticide registrations, as well as registration-related technical and policy issues.
Wu Kang (Technical Director of Congshan Consulting) and Hong Feng (General Manager of Pilarquim) have both been personally engaged in overseas pesticide registrations for many years, and are senior experts in the pesticide registration. At the workshop, the two registration experts gave a detailed introduction to the changes that have taken place in the Brazilian market resulting from Brazil's new laws and regulations adopted in recent years. The experts also addressed prohibitions or restrictions and their effects on markets in Africa, Central and South America, which are less influenced by Chinese companies.
After two days of exchanges and interactions, CPEW2020 came to an end successfully. During the workshop, a large amount of useful information was shared and the valuable experiences of senior industry practitioners were passed on. All participants affirmed that they have benefited from the thoughts and insights given at the workshop. From the first edition of CPEW without overseas participation, to CPEW2019 with the participation of nearly 100 overseas purchasers, up to the present session without overseas physical participation due to the current crisis, over 500 people have now participated in CPEW. CPEW has become the first choice platform of exporters for exchanging knowledge and learning from each other, and opened a window for their overseas counterparts to learn about the Chinese pesticide industry and the people involved.
When watching a live photo stream at the event, the overseas audience who have always paid attention to CPEW were amazed at the desire of Chinese agrochemical personalities to learn and communicate with the outside world. The keynote speaker, Renato Seraphim (CEO of AGRO100), said, "In December 2019, I was excited to receive an invitation to attend CPEW2020. The pandemic changed the world, everything came to a standstill. Unexpectedly, the Chinese industry quickly recovered amidst the pandemic. There are no empty seats in the conference hall. There are not too many masks. It seems that we are back to normal."
A more exciting CPEW2021 is coming
After four years of smooth running, CPEW has received considerable support and advice from its friends at both home and abroad, becoming a major event for the Chinese agrochemical industry. AgroPages continues to welcome leading agrochemical companies worldwide to join the CPEW platform. We look forward to seeing our colleagues from around the world with handshakes at CPEW2021 next year.
Contact us if you have any of the following requirements for CPEW2021:
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