Net profit of Lier Chemical hit RMB1 billion in 2021

On March 5, 2022, Lier Chemical and its holding subsidiary Jiangsu Kuaida Agrochemical released the 2021 annual report.

Lier Chemical

In 2021, Lier Chemical overcame the adverse impacts such as temporary suspension of production at its major base and fluctuations in the supply chain, having effectively improved the work safety and environmental compliance of the company. Lier Chemical also worked hard to ensure its production run and product supply, and made use of the market opportunity, thus achieving a record high performance. During the reporting period, Lier Chemical achieved a consolidated operating income of RMB6.494 billion which is an increase of 30.70% year on year, a net profit attributable to the shareholders of RMB1.072 billion which is an increase of 75.17% year on year, and a net profit after deducting non-recurring gains and losses attributable to the shareholders of RMB1.063 billion which is an increase of 82.23% year on year. 

During the reporting period, Lier Chemical’s pesticide business generated an operating income of RMB5.999 billion which is an increase of 30.04% year on year, accounting for 92.37% of the total operating income. Among them, the pesticide technical output was 36,358.83 tons, with the sales of 35,231.25 tons, generating an operating income of RMB4.331 billion, at an increase of 26.91% year on year, accounting for 66.69% of the total operating income. The output of pesticide formulation was 42,995.16 tons, with the sales volume of 43,699.82 tons, generating an operating income of RMB1.363 billion, at an increase of 26.57% year on year, accounting for 20.99% of the total operating income. Lier Chemical’s overseas sales revenue was RMB3.026 billion, which is a substantial increase of 60.73% year on year, accounting for 46.60% of the total operating income; the domestic sales revenue was RMB3.468 billion, which is an increase of 12.38% year on year, accounting for 53.40% of the total operating income. 

In 2021, Lier Chemical spent RMB263 million on R & D, accounting for 4.05% of the total operating income. It is worth mentioning that the company increased spending on development of new process for production of new products, having built a multi-functional research and pilot platform. The mainstream synthesis approach has been established for some of the products of the company, which have been placed on a pilot production. Research programs which are currently in the process include: optimization of processes for glufosinate, flumioxazin and fluroxypyr; new process for epoxiconazole, L-glufosinate, pinoxaden, chlorantraniliprole and fire retardant. These research programs will provide technical reserves for the company’s future prospects on a long-term basis, which are conducive to improvement to the market competitiveness of the products of the company and increase of the profit growth area of the company in the future.

In 2021, the two main production bases of Lier Chemical stayed operational in close association with each other, where Guang’an base continued its upgrading of the methyl dichlorophosphite process, having greatly improved the reliability and stability of the production plant, and completed upgrading of the continuous process of glufosinate and flumioxazin, thus achieving the scale-up production which leads to a substantial increase in the production capacity. This has effectively enhanced the company’s glufosinate production capacity and market competitiveness. The performance of Guang’an base increased significantly over the previous year, having achieved an operating income of RMB2.237 billion and a net profit of RMB673 million.

In 2021, Lier Chemical seized market opportunities and could continuously strengthen cooperation with major customers in broader field and in more depth. The company has made a quick market deployment for its core products; and has entered into strategic alliance with key customers via joint venture operation, having effectively reinforced the market position of the dominant chloropyridine products of the company.

Lier Chemical has continued to take compliance-oriented corrective actions in each production base and has achieved considerable progress in environmental compliance and work safety; has optimized the QEHS management structure by establishing a work safety management department and QEHS monitor mechanism, which ensure a smooth running of the EHS system through cross-inspections among the subsidiaries.

Kuaida Agrochemical

In 2021, Kuaida Agrochemical overcame various adverse impacts such as the short supply of major chemical raw materials and the energy consumption control policies in China, having effectively organized production and marketing activities adapted to the market changes. The company has also conducted process optimization and product registration, which resulted in the satisfactory business performance. During the reporting period, the company achieved an operating income of RMB923 million which is an increase of 1.22% year on year, net profit attributable to shareholders of RMB88.0401 million which is an increase of 22.19% year on year, and net profit attributable to shareholders of RMB83.6576 million after deducting non-recurring gains and losses which is an increase of 22.90% year on year.

During the reporting period, the operating income of Kuaida Agrochemical’s technicals reached RMB562 million which is an increase of 17.94% year on year; the operating income of formulations was RMB184 million, down 23.58% year on year; the operating income of intermediates was RMB85.1902 million, which is a sharp increase of 87.32% year on year, mainly due to the increase in the unit price and sales volume of the acyl chloride products. The company’s products are mostly sold in domestic market, where domestic sales revenue was RMB755 million, down 1.05% year on year; the overseas sales revenue was RMB167 million, up 14.33% year on year.