Sino-Agri Leading: Providing a value-added supply chain platform for the global crop protection market

This article was initially published in AgroPages' 2023 China Pesticide Industry Watch magazine.

China’s national general program aims to secure China’s food supplies and promote rural revitalization. This program has provided the foundation and guidance for the rapid development of agriculture and the resultant growth of the agri-inputs market. The industry growth continued despite challenges of the Covid-19 pandemic demonstrating the resilience of agriculture and the agri-inputs business in China.

Sino-Agri Leading Biosciences Co., Ltd. (SAL) has been at the forefront in distribution of agri-inputs for the domestic Chinese market. An extensive countrywide sales network, a ″one-stop″ supply platform and continuous improvement in product offerings and services, has enabled SAL to rapidly develop and establish a leading position in the industry. Leveraging on its strong domestic resource integration capability, SAL is looking to address emerging opportunities in international markets with a strong growth momentum.

As an observer of international agrochemical industry trends and enterprise development, AgroPages exclusively interviewed SU Yi (Board Chairman and General Manager of SAL), who explained SAL’s strategic advantages, business approach and emerging focus on international markets. This should enable global crop protection industry to get a balanced view of the company.

SU Yi, Chairman and General Manager of SAL

  SAL: The ″national team″ of agricultural materials distribution in China  

Established in 2009, SAL is a large agricultural material distribution company under the umbrella of the All China Federation of Supply and Marketing Cooperatives (China CO-OP). China National Agricultural Means of Production Group Corporation (Sino-Agri Group) is the largest shareholder of SAL with a 50.25% stake. As a key national agricultural support provider, SAL implements projects that benefit farmers such as ensuring reserves of pesticides for national disaster relief, creating a ″Modern Distribution Service Network Project in New Rural Areas″ and piloting a new agricultural socialization service system. 

In 2017, SAL was listed on the A-share capital market, becoming the only listed agricultural materials distribution platform under China CO-OP.

SAL specializes in

• Agrochemical distribution

• Providing technical services for crop protection, and

• Supply of machinery for crop protection

As part of this, SAL sells technical pesticides, their formulations and related products while providing growers crop health solutions, technical guidance and product application demonstrations. SAL on an average conducts more than 10,000 technical training sessions every year thereby serving about 8 million farmers.

SAL has structured its activities through six verticals which include

• International business

• Joint Sales business

• Chemical material trade business

• Crop health business (domestic brand distribution business)

• Formulating and repacking business

• Crop protection machinery

In recent years, despite the impact of the Covid-19 pandemic which disrupted global supply chains, SAL has maintained its rapid growth with operating revenues growing at a compounded growth rate (CAGR) of 26% from RMB 3.50 billion in 2017 to RMB 8.82 billion in 2021 and in terms of sales revenue is ranked fourth in China’s crop protection industry. In the first three quarters of 2022, SAL’s operating revenue reached RMB 9.684 billion, up 29.56% year on year and annual revenue for 2022 is expected to exceed RMB 10 billion.

Having a large, robust product distribution and service system in China is not the only reason for SAL’s strong growth and development. Since 2019, the company has been integrating resources from different parties to vigorously develop its international business, bringing new growth momentum to SAL.

 Sino-Agri Leading International: Integrating external resources for rapid global penetration 

SAL established its International Business Segment (″Sino-Agri Leading International″) in 2011, and actively applied for overseas pesticide registration and in 2014 set up Sino-Agri Leading (Shanghai) to facilitate international trade. From The 2014 to 2018 Sino-Agri Leading (Shanghai) expanded presence in international market by establishing six overseas subsidiaries in Argentina, Colombia, Ecuador, Peru, Dominica and Singapore. It worked on a business model for international market operations, with footprints in over 90 countries spanning South America, Africa, Southeast Asia, the Middle East and Europe.

In 2019, in response to the increasing demand for quality agri-inputs in overseas markets, SAL made an important strategic decision to grow its international business, by establishing a new joint venture with Nanjing Red Sun Co., Ltd. (Red Sun), under the name Sino-Agri Red Sun Bio-technology Co. Ltd. (″Sino-Agri Red Sun″). This became a new platform company with the cross-border supply chain of green pesticides as its main business. And now, a more comprehensive structure has been created by SAL’s International Business Segment.

At present, the main operational entity of SAL’s international business segment is Sino-Agri Leading International, under which there are Sino-Agri Red Sun and seven overseas subsidiaries in Argentina, Colombia, Ecuador, Peru, Dominica, Singapore and Brazil.

Relying on the product resources of SAL, Red Sun and external investors, Sino-Agri Leading International integrates the global registration resources of Sino-Agri Leading (Shanghai) and Red Sun, as well as their channel resources in South America, Asia Pacific, North America, Europe and Africa. Supported by an operations team with excellent professional capabilities and shared management philosophy, Sino-Agri Leading International is rapidly advancing its global market presence, to provide international customers with cost-effective agrochemical products together with reliable and efficient services.

At present Sino-Agri Leading International’s business is mainly concentrated among large multinational customers and in markets of Latin America, North America, Asia Pacific, Africa and Eastern Europe. The top countries in terms of sales include globally important agricultural markets, such as Brazil, Argentina, the US and Russia, as well as regions with promising potential, such as Nigeria, Australia, Colombia, Paraguay, India and Indonesia.

Sino-Agri Leading International has adopted different business models to enter the market, based on various regional characteristics. In Eastern Europe, North America, Africa and Asia-Pacific, Sino-Agri Leading International has relationships with regional or local importers of different sizes by supporting the registration of technicals and formulated products. In South America and Central America markets, Sino-Agri Leading International is mainly providing registration support while licensing its approved registrations to importers and distributors, to tap into overseas sales of products which are independently registered by Sino-Agri Leading International.

By fully integrating its internal and external resources, Sino-Agri Leading International is able to offer its own unique competitive advantages in the following five areas:

Product Portfolio: The company has a portfolio of more than 254 high-quality products for the herbicide, fungicide and insecticide segments. There are four core products with sales exceeding RMB100 million. Its non-selective herbicides are very competitive and have enabled the company achieve a leading market share. Its sales of Paraquat alone accounts for around a third of China’s exports.

Market access: Since 2014, Sino-Agri Leading International started to register products independently in 16 countries. At present, the company holds nearly 1,500 overseas pesticide product registrations, of which about 15% are independent registrations. In Brazil, where registration standards are rigorous and the market potential is large, Sino-Agri Leading International has more than 30 independent registrations, including over 10 formulation registrations and more than 60 ongoing product registrations. This should enable the rapid opening up of this key market with significant first-mover advantage.

Customer Relationships: Sino-Agri Leading International has established long-term cooperative relationships with nearly 400 strategic partners in more than 90 countries across five continents, giving it large and stable customer base. The company is committed to being an effective procurement and sales channel for customers with a deep understanding customers’ demands for product quality and distribution. By using its accurate understanding of markets and industry trends along with sound judgement, it hopes to optimize its supply chain services and build on trust and loyalty of customers.

Service: Sino-Agri Leading International has an application technology R&D and testing center and a crop protection technical service team comprising hundreds of experts. The company has accumulated practical experience in crop solutions, and is capable of providing timely and efficient technical support in formulation development, according to customers’ requirements. The team can provide strong background support for formulation technology, innovation and quality control to its international customers.

Professional and Dedicated Team: Adrienne Chang (General Manager of Sino-Agri Leading International) is a business leader who has more than 18 years of experience in international market development and pesticide sales. Members of her team have professional backgrounds in foreign languages, crop protection, and the chemical industry, as well as related international business development experience, knowledge of overseas registration laws and regulations, distribution channels. They have a sound understanding of customer needs together with strong resource integration capabilities.

Huang Baiji (third from right), SAL’s executive deputy general manager, Adrienne Chang (fourth from left), Sino-Agri Leading International’s general manager, and team members are communicating with overseas customers at the exhibition

Based on the above advantages, from 2020 to 2022, the sales of Sino-Agri Leading International grew rapidly at an annual rate of over 45%, accounting for about one-third of SAL’s total revenue. In 2021, the company ranked ninth in terms of value among Chinese pesticide export enterprises.

  Becoming a value-added global supply chain platform for agricultural crop protection market  

The global impact of the energy and food crisis caused by local political and military conflicts still lingers. In China, the three-year COVID-19 pandemic has ended, and China’s production and manufacturing need to create a brand-new image in the international market and regain global confidence in its supply chain. During this turbulent period full of challenges and opportunities, SAL will strengthen the integration of products, capital, technology, channels, brands and other resources, as well as make appropriate plans for addressing all aspects, be it supplies, markets, risk prevention and control, and strive to seize development opportunities and showcase an outstanding Chinese brand.

At the supply side, SAL will further strengthen the development of product resources and enhance its cooperation with leading bulk product manufacturers, innovative manufacturing companies, formulation R&D, processing and repacking companies, and players with industrial chain advantages, as well as establish a sound supplier entry, evaluation, audit and risk control management system. It will integrate the product resources of leading domestic herbicide manufacturers, including paraquat, diquat, glyphosate, glufosinate and L-glufosinate, and strive to build the largest international supply platform for non-selective herbicides.

SAL will also expand its service scope with its channel partners. In addition to providing high-quality pesticide products, SAL will offer professional crop protection technical services, comprehensive planting services, and famous and excellent agricultural product creation services.

At the end of the market, SAL will continue to strengthen its long-term strategic partnership with Tier-II customers, while exploring innovative models of independent brand sales and technical services in regional markets, with its unique resource advantages. Meanwhile, SAL will leverage the sales network advantages of Sino-Agri Leading International, to help domestic producers expand their international sales channels and pioneer sales of new Chinese compounds in overseas markets.

Chinese agriculture has many good opportunities created by policies, such as the approval of the commercial cultivation of GM seeds. The seed industry is a strategic industry in China, and seeds are considered the ″chips″ of agricultural production. As a leading agri-inputs supplier in China, SAL’s strategic move to invest in Sino-Agri Seed Holding Co., Ltd. will further support the extension of its industry chain and realize the synergistic development of ″seeds + pesticides,″ therefore, driving the development of the company’s business.

By steadily moving forward on medium- and long-term development trends, SAL aims to become a value-added global supply chain platform for the agricultural crop protection market, empowering upstream and downstream customers through the integration of products, capital, technology, channels, brands and other resources, and collaborating with the global crop protection industry for an ecological win-win.

In 2023, in light of the rapid development of its international business, SAL will upgrade and refresh the overall brand of Sino-Agri Leading International. On March 20, 2023, at the Hangzhou International Expo coinciding with AgroChemEx 2023, SINO-AGRI Renewed Brand Unveiling Ceremony is scheduled to be launched. This will present and explain the new brand strategy and visual image of Sino-Agri Leading International to global participants in agriculture, and highlight its philosophy and aspirations.

SAL will warmly welcome friends from the industry and all walks of life to witness this transformation.