Building a value platform for non-selective herbicides and shaping the global agrochemical industry chain

In today’s ever-evolving global agricultural landscape, the non-selective herbicide market is undergoing an unprecedented transformation. The continuous expansion of genetically modified (GM) crop planting areas has injected strong momentum into the industry. However, challenges such as overcapacity, drastic price fluctuations, and increasing environmental pressures still exist. Amid this dynamic market landscape, how Sino-Agri Leading Biosciences Co., Ltd., China’s largest agrochemical distribution platform, responds to market changes and builds a new ecosystem for industry development has become a focal point for the industry.

In this exclusive interview, we are honored to have Mr. Huang Baiji, General Manager of Sino-Agri Leading Biosciences, delve into the status quo and future of the global non-selective herbicide market. Mr. Huang not only elaborates on Sino-Agri Leading Biosciences' innovative concept of building a ″non-selective herbicide value platform″ but also introduces the strategic framework of Sino-Agri Leading Biosciences’ international platform, SINO-AGRI, which assists Chinese agrochemical companies in going global.

Sino-Agri Leading Biosciences’ development can be seen as the latest embodiment of the globalization layout of China’s agrochemical industry chain. By building a global supply chain value platform, promoting resource integration and optimization, and deepening international cooperation, Sino-Agri Leading Biosciences is helping more Chinese agrochemical companies to safely and efficiently enter the global agrochemical trade market. This open, inclusive, and mutually beneficial development philosophy will undoubtedly inject new vitality into the sustainable development of the entire industry.

Interviewee: Mr. Huang Baiji, General Manager of Sino-Agri Leading Biosciences Co., Ltd.

AgroPages: Could you briefly introduce the overall situation of the global non-selective herbicide market today? What significant changes have occurred in the market in recent years?

Huang Baiji: The global non-selective herbicide market is steadily growing. The high adoption rate of herbicide-resistant GM crops in major planting countries will keep this type of herbicide in a leading position among pesticide varieties. According to Agbioinvestor, in 2022, the four major non-selective herbicides—paraquat, diquat, glyphosate, and glufosinate—accounted for 11.88% of the overall pesticide market scale. With the widespread adoption and further penetration of herbicide-resistant GM crops in core planting countries, the global GM crop area is increasing year by year. The application advantages of non-selective herbicides are becoming more prominent, placing them in a low-profit but high-sales volume long-tail market.

Market share of four major non-selective herbicides—paraquat, diquat, glyphosate, and glufosinate—in recent years

Although the market scale of non-selective herbicides is steadily expanding, the global non-selective herbicide market has experienced adjustments and fluctuations in recent years. Chinese companies have increasingly replaced the market share of multinationals. Due to overcapacity, the market faces complex external environmental changes, such as regulatory policies in various countries restricting or banning paraquat and glyphosate, abnormal global climate featuring frequent extreme weather, and supply chain challenges resulting from raw material price fluctuations and supply chain instability. From the supply-demand perspective, the global non-selective herbicide market is generally oversupplied, leading to fierce competition. Especially in terms of price, non-selective herbicides have experienced ″roller-coaster″ trends in recent years. Particularly since 2023, due to factors such as the lifting of the pandemic, weak foreign trade, overcapacity, and an off-season market, the prices of non-selective herbicides like glyphosate have drastically fluctuated from sharp rises to steep falls.

AgroPages: How do you view the relationship between GM crop planting and the non-selective herbicide market? What impacts do this relationship have on the future market development?

Huang Baiji: The non-selective herbicide market is closely related to the development of GM crop planting. As global agricultural production expands and the GM crop planting technology matures, the non-selective herbicide market scale will continue to grow. Due to the characteristics of non-selective herbicides, the market of selective herbicides is gradually taken over by non-selective herbicides, leading to changes in the structure of herbicide products.

The integration driven by genetically modified (GM) crops within the pesticide industry is conducive to the concentration of production capacity. GM technology fosters the combination of seed and pesticide businesses, creating a new Sino-Agri Leading Biosciences model of ″GM seeds + pesticides,″ which has influenced the structure and competitive landscape of the entire industry chain. However, with the extensive use of glyphosate over the years, weeds have developed increased resistance to it, necessitating the development of new varieties and products as tools for managing glyphosate-resistant weeds. This also brings new opportunities to the herbicide market.

AgroPages: Based on your observations, what are the main challenges the upstream and downstream entities face in the current non-selective herbicide segment? How do these challenges affect the development of the segment?

Huang Baiji: Currently, the non-selective herbicide segment is facing unprecedented challenges that affect all aspects of the segment and drive its transformation and upgrading.

On the upstream supply side, companies are under multiple operational pressures. Firstly, overcapacity has intensified market competition, continuously squeezing profit margins. Secondly, downstream customers are shifting to on-demand purchasing models, which places higher requirements on suppliers’ peak delivery capabilities. Additionally, insufficient operating rates have increased operational pressures on factories, making it challenging to distribute fixed costs effectively. Lastly, diversified trade settlement methods pose new challenges to companies’ financial operations, necessitating enhanced financial management skills.

Meanwhile, the downstream distribution side is also facing numerous difficulties. Frequent price fluctuations of products have heightened operational risks, and issues related to supply chain security are becoming increasingly prominent. Furthermore, the uncertainty of the global economic environment has led to more significant impacts from exchange rate fluctuations, directly affecting companies' profitability. Intensified channel competition and more rational customer procurement behavior compel companies to continuously enhance their market competitiveness and service levels. 

10-year price tracking of the four major non-selective herbicides 

These challenges have had a profound impact on the development of the segment. Firstly, they have driven the transformation and upgrading of the segment. Fluctuations in raw material prices and stricter environmental regulations have driven companies to ramp up their technological innovation and environmental protection investments, steering the segment toward higher-end, smarter, and more concentrated development. Secondly, overcapacity and heightened market competition have pushed manufacturers to optimize resource allocation and improve their market analysis and forecasting capabilities, enabling them to respond more flexibly to market changes. Lastly, in the context of globalization and increasing uncertainties, strengthening international cooperation has become essential for companies to tackle fierce competition and tap into overseas markets to alleviate excess capacity. Companies can share resources and technological advantages by engaging in diverse trade cooperation methods, expanding market channels, and effectively mitigating operational risks.

AgroPages: Sino-Agri Leading Biosciences proposes to build a ″non-selective herbicide value platform.″ Could you elaborate on the core concept and operating model of this platform?

Huang Baiji: While the challenges mentioned are typical in the industry, the growing uncertainties from shifts in the global political and economic landscape in recent years have substantially impacted all stakeholders, particularly in international operations. In light of this situation, Sino-Agri Leading Biosciences has proposed building a ″non-selective herbicide value platform.″

As a listed centrally administered SOE (state-owned enterprise) operated agrochemical distribution platform, Sino-Agri Leading Biosciences possesses robust capabilities in products, technology, channels, information, funding, and policy support. The company firmly embraces a business philosophy centered on ″agriculture-focused, platform thinking, mutual benefit, and win-win,″ which is ingrained in its operational model.

Sino-Agri Leading Biosciences approaches its business with a platform mindset, empowering its upstream and downstream supply chains while promoting the idea of mutual benefit and win-win outcomes across the industry. The company's main strength lies in its service-oriented approach, which fully utilizes its diverse resources to cater to strategic core customers throughout the supply chain, thus fostering strategic complementarities.

By adopting this approach, Sino-Agri Leading Biosciences continuously injects value drivers into its partners. The company is committed to creating a more prosperous future through strategic collaboration and complementarity with its partners, thereby promoting the development and progress of the agrochemical industry.

AgroPages: In light of the current fluctuations and risks in the agrochemical market, how does Sino-Agri Leading Biosciences help downstream channel partners enhance their operational stability and efficiency through innovative initiatives? Specifically, what measures has Sino-Agri Leading Biosciences implemented to mitigate procurement risks and optimize inventory management?

Huang Baiji: As a centrally administered SOE-operated agrochemical distribution platform, Sino-Agri Leading Biosciences has established a comprehensive response strategy backed by robust financial resources, guided by professional information services, and supported by a stable supply chain. Through strategic cooperation with top domestic suppliers and promoting the ″non-selective herbicides supply chain platform" strategy, Sino-Agri Leading Biosciences provides support and value-added services to downstream channel partners. These initiatives strengthen the cooperation with channel partners and enhance the supply chain’s overall efficiency and risk resistance.

To mitigate procurement risks, we have adopted a comprehensive strategy. We have combined internal and external resources to create a well-organized, all-in-one pesticide supply platform, which provides our channel partners with various products, thus reducing dependence on any single supplier. At the same time, we have established strategic partnerships with leading companies in the industry to ensure a consistent supply of high-quality products. Moreover, we have introduced and regularly updated technical material price index offering our channel partners market trend references to help them make more informed procurement decisions.

Sino-Agri Leading Biosciences and Yangnong Chemical signed a cooperation agreement

We have made substantial efforts to optimize inventory management and enhance operational efficiency. By collaborating closely with upstream and downstream partners, we have streamlined our supply chain processes, helping our channel partners lower operational costs and improve overall efficiency. Drawing on our background as a centrally administered SOE and our strong resource integration capabilities, we offer our partners effective logistics and warehousing support, significantly reducing inventory backlogs and capital tied up in stock.

Ultimately, we aim to foster closer cooperation with our channel partners through these innovative initiatives, jointly improving the stability and efficiency of the entire agrochemical industry chain and contributing to the industry's sustainable development.

AgroPages: What unique advantages does SINO-AGRI, the international platform of Sino-Agri Leading Biosciences, offer in integrating global agrochemical resources? How do these advantages assist customers and partners in tackling current challenges in the non-selective herbicide market?

Huang Baiji: SINO-AGRI is currently the largest agrochemical distribution platform in China. With substantial financial backing, extensive sales channels, competitive cost advantages, reliable supply chains, and the solid reputation of a centrally administered SOE, SINO-AGRI has established a robust foundation for operating non-selective herbicide products.

SINO-AGRI has a significant brand presence and an extensive market network. As the international brand of Sino-Agri Leading Biosciences, SINO-AGRI is backed by a robust industry foundation and enjoys widespread market recognition. Its distribution network reaches over 90 countries and regions, allowing it to provide agrochemical products and services globally. This international market presence enables SINO-AGRI to respond swiftly to regional market demands and offer customized solutions to its customers. The platform boasts a wealth of product resources and supply chain management expertise, integrating high-quality domestic and international resources to provide customers with better prices and services.

As a leading platform in the agrochemical industry, SINO-AGRI assists customers and partners in addressing the challenges in the non-selective herbicide market through its diverse advantages. These advantages are evident in three key areas: enhancing market competitiveness, reducing operational costs, and adapting to market changes. 

• Enhancing market competitiveness for international customers and strengthening cooperation for mutual benefit:

SINO-AGRI empowers its customers and partners to boost their market competitiveness by providing ample product resources and expert technical support. It is dedicated to fostering long-term, stable partnerships with global partners to jointly advance the agrochemical industry. Through resource sharing, technical collaboration, and mutually beneficial cooperation models, SINO-AGRI facilitates business growth and value enhancement for its customers and partners.

• Reducing operational costs and improving efficiency:

By integrating global agrochemical resources, SINO-AGRI optimizes and manages the supply chain, helping customers and partners reduce operational costs and enhance efficiency. The platform’s high-quality products and services also help further reduce procurement costs and associated risks. SINO-AGRI offers flexible financial solutions to address the complexities of international markets and cross-border operations, including internal credit and adaptable payment terms, alleviating customers' financial pressures and improving their working capital management.

• Adapting to market changes:

In the face of market fluctuations and technical challenges, SINO-AGRI utilizes its strong brand influence and market network to respond promptly to customer needs, delivering tailored solutions. This agility enables its customers and partners to navigate market shifts effectively, ensuring business stability and sustainability.

SINO-AGRI has established long-term cooperative relationships with over 500 global customers, providing a reliable business source and market foundation for the platform. Additionally, SINO-AGRI has developed enduring partnerships with competitively positioned pesticide manufacturers at home and abroad, collectively advancing the development and progress of the agrochemical industry.

AgroPages: SINO-AGRI plays a vital role in facilitating the internationalization of Chinese agrochemical companies. Could you elaborate on the company's innovative initiatives and unique services in this area, mainly how they assist these companies in expanding globally?

Huang Baiji: SINO-AGRI has implemented a series of innovative initiatives to support the internationalization of Chinese agrochemical companies. Our efforts focus on the following key areas: First, we collaborate to create a reliable cooperative service platform with upstream suppliers, effectively balancing production capacities. Second, we have developed a robust channel structure, with our channel network extending to over 90 countries and regions, effectively complementing main channels. Additionally, in 2023, we underwent a rebranding, adopting a new brand concept and logo to better align with international market demands and enhance our brand image.

Regarding business model innovation, we are actively promoting the international operations of our brands to strengthen the competitiveness and influence of Chinese agrochemical companies abroad. We are also dedicated to building a supply chain value platform for non-selective herbicides, integrating resources from both upstream and downstream to offer partners more efficient and sustainable crop solutions.

We offer unique support and services to our partners, focusing on the following four aspects:

Product support: We supply high-quality herbicides, insecticides, and fungicides to global customers and tailor our product solutions to meet specific customer needs, ensuring compliance with local regulations and usage practices.

Supply chain support: By integrating premium domestic and international resources, we ensure a stable supply of products and strict quality control. We have also established a robust supply chain management system to reduce supply chain risks and enhance its resilience and safety.

Market expansion support: We assist partners in acquiring pesticide registration certificates and facilitating access to various international markets. Through our global sales network, we help partners widen their sales channels and increase market share.

Financial services and support: We offer flexible credit options to assist partners in expanding and developing their overseas ventures. Additionally, we provide various financial solutions, including trade financing and foreign exchange risk management, to help reduce financial costs.

Through these innovative initiatives and unique services, SINO-AGRI delivers comprehensive support to Chinese agrochemical companies aiming to "go global," enabling them to establish competitive advantages in the international market and achieve sustainable growth.

AgroPages: What distinct advantages does the background of being a centrally administered SOE and the status of a listed company provide to SINO-AGRI?

Huang Baiji: The background of being a centrally administered SOE and a listed company offers numerous advantages to SINO-AGRI. First, this background confers strong brand influence and public credibility, which helps establish an authoritative presence in the international market and fosters trust among customers and partners. Second, it provides unique strengths in supply chain integration, allowing the establishment of long-term, stable partnerships with high-quality suppliers both at home and abroad, thereby delivering comprehensive supply chain solutions to customers. The financial strength associated with being a centrally administered SOE and a listed company is also significant, with a credit limit exceeding RMB8 billion, which provides strong support for business development. Additionally, the company has developed a sales network that spans over 90 countries and regions, facilitating international expansion and enabling swift responses to market demand changes. Finally, introducing advanced management practices and a rich talent pool continuously enhances management quality and team capabilities.

AgroPages: How does Sino-Agri Leading Biosciences balance its social responsibilities as a centrally administered SOE with its market-oriented operations? What leadership role does Sino-Agri Leading Biosciences aspire to in fostering the healthy development of the industry?

Huang Baiji: Sino-Agri Leading Biosciences actively strives to balance its social responsibilities with market-oriented operations. The company is committed to serving agriculture by providing high-quality agrochemical products and technical services to improve crop yield and quality for farmers. As a professional agrochemical distribution service provider and a listed company under the All-China Federation of Supply and Marketing Cooperatives, Sino-Agri Leading Biosciences undertakes several national policy initiatives, including the "Modern Circulation Service Network Project for New Rural Areas" and the "Central Disaster Relief Pesticide Reserve." Regarding market-oriented operations, the company has established a one-stop pesticide distribution platform encompassing active ingredients, formulations, biopesticides, and plant protection machinery, effectively integrating supply chain resources. Furthermore, Sino-Agri Leading Biosciences optimizes its risk control systems through various means to minimize operational risks while improving capital utilization efficiency, laying a solid foundation for sustainable growth.

In promoting the healthy advancement of the industry, Sino-Agri Leading Biosciences plays a leading role in several areas. The company advocates for green, efficient, scientifically-informed plant protection strategies, promoting pesticide products with high efficacy, low toxicity, and minimal residues. Through free training sessions and on-site technical guidance, Sino-Agri Leading Biosciences enhances farmers' ability to use pesticides scientifically. The company also prioritizes technological innovation and product development, continually advancing R&D levels in pesticide formulations to provide farmers with state-of-the-art formulations and solutions. Sino-Agri LeadingBiosciences has created a comprehensive agrochemical distribution service platform that integrates products, services, and information, fostering coordinated development across the upstream and downstream agricultural value chain. Additionally, the company actively fulfills social responsibilities by engaging in initiatives related to poverty alleviation, rural revitalization, and other public welfare undertakings, like donating pesticide products and technical support and establishing scholarships to support agricultural education, making significant contributions to the industry’s sustainable development.

AgroPages: What role will SINO-AGRI play in advancing the global layout of China's agrochemical industry chain? How will the platform further support Chinese enterprises that are deeply participating in global agrochemical market competition?

Huang Baiji: SINO-AGRI is dedicated to leveraging its unique strengths to further the global agrochemical industry's development. The company intends to create a global supply chain value platform that offers stable international supply chain services to Chinese agrochemical companies, thus lowering barriers to market entry and reducing operational costs for them. By integrating high-quality products, technologies, and channel resources from domestic and international sources, SINO-AGRI aims to optimize resource allocation and boost the competitiveness of Chinese agrochemical companies on the global stage. The company has also unveiled a new brand concept and logo, guided by the vision ″To build a shared global future with inclusive agriculture,″ and committed to being the facilitator of the global efforts in crop protection and the contributor of the industry advancement on a win-win basis that reflects principles of openness, inclusivity, and equality while embracing market changes and challenges with a proactive mindset.

To achieve these objectives, SINO-AGRI has laid out a series of specific initiatives. First, the company plans to increase investments in critical countries and regions and independent registration efforts, establishing overseas subsidiaries and forming international teams to enhance localized service capabilities and responsiveness to market demands. Second, it will adjust and optimize its product supply structure in response to global market trends, emphasizing promoting highly effective green pesticide products that are low in toxicity.

Regarding channel development, SINO-AGRI aims to allocate more resources to expand its overseas sales network, continually strengthening strategic partnerships with B-end customers and assisting domestic innovative manufacturers in broadening their international sales channels. Concurrently, the company will explore innovative sales models and technical services for self-branded products aimed at the C-end market.

SINO-AGRI will also intensify its brand-building and promotion efforts to enhance the international visibility and reputation of Chinese agrochemical brands, thereby capturing a larger global market share for Chinese companies. Furthermore, the company will bolster international collaborations, engaging in deep partnerships with leading producers of significant products and innovative manufacturers to strengthen the resilience and security of the supply chain. Through these initiatives, SINO-AGRIl aims to significantly contribute to the sustainable growth of the global agrochemical industry.

This interview was originally published in AgroPages magazine 2024 Latin America Focus. Download to read more.