Lier Chemical’s net profit increases by nearly 80% in first three quarters, Guang’an production base enters trial operation

According to Lier Chemical’s latest announcement, due to the increase in sales volume and sales price of some of its products, the company’s net profit in the first three quarters reached Yuan410 million to Yuan420 million, which is expected to be 75% to 80% up year-on-year, with the increase in the single third quarter expected to be 106.73% to 122.38%.

Lier Chemical is the largest glufosinate manufacturer in China, with a total annual production capacity of 17,000 tons, located in its Mianyang and Guang'an production bases. Since 2020, glufosinate has been in a short supply in China with prices rise, due to a shortage of intermediates. According to Sino-Agri Price Index, as of 27th September, 2020, the price of glufosinate technical in China was roughly Yuan150,000 per ton, which was 36.36% higher than Yuan110,000 per ton at the start of the year.

However, the price of glufosinate is still at a historic low. Relevant information shows that the highest price of glufosinate technical appeared in 2014, hitting Yuan315,000 per ton. The two lowest price levels in recent years were Yuan136,900 in 2019 and Yuan110,000 in early 2020.

On the other hand, in December 2019, Lier Chemical announced the suspension of production of its Guang’an production base to enable it to integrate its production lines, which, after completion, will realize the company's cost advantage. A responsible manager said, "At present, our Guang'an product base is in normal trial operation, just a step away from official operation until a technical problem is solved.” Up to the end of the first half of 2020, there are still construction works valued at Yuan1.6 billion in progress. 

According to statistics, the global sale of glufosinate reached $920 million in 2019, which is expected to reach $1billion in 2020. The compound annual growth rate of glufosinate in the last 10 years reached 12%, becoming the second largest GM crop herbicide in the world. From a demand side, there is continued rapid growth.