Yangnong Chemical’s Youchuang project kicks off, new capacity to be launched

Several days ago, China’s Yangnong Chemical released its 2023 semi-annual report. According to the report, in the first half of 2023, the company attained an operating income of RMB7.067 billion yuan, a year-on-year decrease of 26.1%; a net profit attributable to the parent company of RMB1.124 billion yuan, a year-on-year decrease of 25.8%; and a net profit attributable to the parent company after deduction of non-recurring gains and losses of RMB1.082 billion yuan, a year-on-year decrease of 31.7%. In the second quarter of 2023, the company’s operating income in a single quarter was RMB2.567 billion yuan, a year-on-year decrease of 40.3% and a quarterly decrease of 43.0%; and its net profit attributable to parent company was RMB370 million, a decrease of 39.4% year-on-year and a quarterly decrease of 51.0%.
　　
Pesticide prices falling, company’s performance in H1 under pressure

In the first half of 2023, there was a lack of demand from both the home market and international markets, which indicated a wait-and-see state. The delay in procurement and destocking led to further oversupply and an overall price reduction, which affected the company’s performance and put pressure on its operations. In the first half of the year, the company’s technical and formulation sales were RMB4.52 billion yuan and 1.34 billion yuan, respectively, a year-on-year decrease of 20.3% and 1.1%, respectively.
　　
Youchuang project kicks off, new capacity to be launched

In April 2023, Yangnong Chemical announced that its wholly owned subsidiary, Liaoning Youchuang, invested in a project in Huludao with an annual output of 15,650 tons of pesticide technical, 7,000 tons of pesticide intermediates and 66,133 tons of by-products. The project’s products include 4,500 tons of insecticides (cyhalothrin and tetrachlorantraniliprole), 8,050 tons of herbicides (imazethapyr and anilofos), 3,100 tons of fungicides (SYP-Z048 and pydiflumetofen) and 7,000 tons of pesticide intermediates, with a total investment of RMB4.23781 billion yuan, and a construction period of 2.5 years. Upon completion and full production, the project will generate an annual revenue of RMB4.083 billion yuan, with an investment return of 17.16% and a financial internal rate of return (after tax) of 15.65%. As a key project for the company, and with full support from Sinochem and the local government, its approval procedure progressed rapidly, and construction has fully started. In the first half of the year, construction spending totaled at RMB616 million yuan, an increase of 49.95% from the end of 2022. In addition, the construction of the Phase IV Youjia project has progressed smoothly, after its successful commissioning.

Product research and development based on integration of generic production and creation, nearly 70 technical materials in production

Yangnong Chemical possesses leading pesticide research and development capacities in China, where its product research and development are based on the integration of generic production and creation. The company has developed a number of creative novel varieties, including meperfluthrin, flumorph, SYP-9625 and tetrachlorantraniliprole, which have become leading products in the Chinese market. Among them, the insecticide, meperfluthrin, is the first creative pesticide variety with sales of more than RMB200 million yuan in China; the fungicide, flumorph, the first pesticide with independent intellectual property rights granted full registration in China; and SYP-9625, the largest acaricide product variety in China. Currently, the company can produce nearly 70 technical materials.