Chinese pesticide companies going global: From breaking through to leading, a microcosm of manufacturing globalization

This article is first published in the "2025 China Pesticide Industry Watch" magazine. To read more articles from the magazine, please click picture in below.

Amidst the profound reshaping of the global economic landscape and the accelerated pace of industrial transformation, China's pesticide industry is confronted with unprecedented opportunities and challenges. 

In recent years, the continuous growth of China's pesticide exports has become a key driver for industry development, steadily enhancing its market share and global influence. However, in the face of intensified international trade frictions, frequent market fluctuations, and increasingly stringent environmental requirements, the industry's development trajectory has become more complex.

Looking at the "going global" journey of Chinese enterprises, they have not only made breakthrough progress in product structure optimization, technological innovation, and brand building but also demonstrated strong resilience and adaptability in expanding overseas markets. Faced with the dual pressures of "de-globalization" trends and global market competition, how to achieve a strategic transformation from traditional production models to high value-added and globalized operations has become a crucial issue for Chinese pesticide companies to achieve high-quality development. This article presents the export performance and overseas path of Chinese pesticide companies through data and case studies, exploring their strategies and future development directions in the global market.

Pesticide Formulations Outpace Active Ingredients in Export Volume and Value, Signaling Successful Structural Shift

The export of Chinese pesticides has become a key driver for the industry’s development. From 2011 to 2020, China’s average annual pesticide production reached 1.48 million tons, reflecting a cumulative growth of 13%. During the same period, the average annual export volume of pesticides reached 950,000 tons, showing an impressive growth rate of 35%. Globally, the robust increase in China’s pesticide exports has primarily compensated for the demand decline in the domestic market caused by the ″zero growth in pesticide use″ policy on pesticides, providing crucial support for capacity expansion. In 2021 and 2022, the proportion of pesticide exports reached a historical high, accounting for 85% of the country’s total pesticide production. Although the overall development of the global agrochemical market slowed down in 2023, the export proportion remained high at 84%, underscoring its vital role in supporting the industry (as illustrated in Figure 1).

Figure 1. China’s Pesticide Production and Export Proportion from 2012 to 2023

From January to August 2024, China’s pesticide exports continued to maintain a growth momentum. Data reveals that the export volume in terms of 100% active ingredient reached 1.33 million tons, reflecting a year-on-year increase of 34.2%. Meanwhile, the export value climbed to $10.6 billion, marking a year-on-year rise of 3.4%. Despite this substantial increase in export volume, pesticide prices remain somewhat weak.

When it comes to the export product structure(Figure.2), in 2023, the export volume of pesticide technicals in terms of 100% active ingredient reached 730,000 tons, while for the first time, the export volume of formulations in terms of 100% active ingredient surpassed that of technicals, reaching 820,000 tons. Both categories achieved an export value of $7.5 billion. This shift indicates that the Chinese pesticide industry has made considerable strides in optimizing its product structure, with high-value-added formulation products gradually emerging as a new driving force for export growth.

This trend continued from January to August 2024, with the export volume of technical and formulations in terms of 100% active ingredient reaching 620,000 tons and 710,000 tons, respectively. Notably, the export value of formulations significantly outpaced that of technicals, totaling $5.7 billion compared to $4.9 billion for technicals. This not only underscores the Chinese pesticide industry’s ongoing commitment to technological innovation and product enhancement but also highlights the strategic success of its transformation towards high-value-added products.

Figure 2. 2021-2024 (1-8) China's Pesticide Export Structure

As environmental regulations tighten and market competition intensifies, China’s pesticide industry is gradually shifting from traditional technical production to research, development, and production of high-value-added formulations, continuously enhancing product value and market competitiveness.

Looking ahead, as industry trends evolve, China’s pesticide industry is poised to capture a larger share of the global market. To achieve this, Chinese pesticide companies must strengthen their presence in international markets and move beyond current development models. Specifically, they need to shift from simply processing and selling raw materials to establishing their brands and prioritizing technological research and development. This strategic shift represents the overall direction for the industry’s future growth.

Global Market Pressures Highlighted In Corporate Performance; Overseas Expansion Remains Steady

Although China’s pesticide export market has generally maintained a growth trend, the ongoing price weakness presents significant challenges for companies in the sector, many of which are seeing their profit margins decline. In 2023, a combination of inventory backlogs in international markets and the concentrated release of global pesticide production capacity caused prices to drop sharply, resulting in a widespread halving of net profits for many companies.

AgroPages conducted a detailed analysis of the revenue performance of 28 listed pesticide companies in China from 2021 to 2023, focusing specifically on their overseas expansion (or going global) and the proportion of domestic and international sales(Figure 3). Overall, pesticide companies experienced a growth trend during this period, peaking in 2022. However, in 2023, 26 of these companies reported a decline in revenue. The primary challenges these companies are facing include fluctuations in exchange rates, changes in international trade policies, weak demand stemming from excessive channel overstocking, and intensified market competition. Exchange rate fluctuations have a direct impact on corporate profits, especially for those heavily reliant on exports. Additionally, changes in international trade policies—such as rising protectionism and anti-dumping investigations—have created significant obstacles for companies expanding foreign markets. Furthermore, the intensified competition in the global pesticide market in 2023 has forced companies to continuously improve their technological capabilities and product quality to remain competitive against both domestic and international rivals.

The pressure from the international market is mainly reflected in the overseas sales proportions of various enterprises. Companies like Rainbow Agro, Yangnong Chemical, Nutrichem, Nantong CAC, and Lier Chemical have consistently maintained a high level of overseas business proportion. In contrast, companies that have primarily targeted the domestic market, such as Sino-Agri Leading and Wynca, are gradually intensifying their efforts to expand internationally. However, in 2023, most enterprises experienced fluctuations in their overseas sales proportions, with 26 out of 28 companies reporting varying degrees of decline.

Figure 3: Sales Revenue and the Proportion of Domestic vs. International Sales for 28 Listed Pesticide Companies in China from 2021 to 2023

Note: 

The data is drawn from publicly available information from listed companies；

The sales figures encompass all business activities of individual companies, including pesticides；

Sales data for each company is presented from top to bottom for the years 2021 to 2023；

Norsyn publically released its sales data from 2022

Despite the impact of the external environment, Chinese pesticide companies are steadily advancing their overseas market expansion strategies and actively responding to various challenges. These companies have achieved overall revenue stability by optimizing their product structures and exploring emerging markets.

Several companies have made notable strides in expanding their presence in overseas markets and securing product registrations. For instance, Rainbow Agro, Hailir, and Guangxin Agrochemical have completed multiple product registrations in various countries and regions, and they are rapidly establishing overseas branches to strengthen their footprint in international markets.

Additionally, some companies are increasing their investment in the research and development of new pesticide products. In 2023, Lier Chemical began the registration and market development of glufosinate-P in several countries, actively promoting its core products. NeoAgro has been actively advancing its overseas operations in thiazole zinc formulations, targeting key countries and core crops while forging strong partnerships with high-quality distribution channels. Red Sun has expedited the overseas registration of products such as diquat dichloride, chlorantraniliprole, and glufosinate-P. Meanwhile, Cynda has conducted efficacy evaluation trials for innovative compounds like pyraquinate and feproxydim across various markets, including Southeast Asia, Central America, and Latin America, and has already initiated independent registration efforts.

In response to market challenges, companies are actively improving their overseas marketing capabilities. Rainbow Agro has launched the ″Rainbow Leadership Program″ to train its overseas management teams. Meanwhile, senior executives from companies like Limin Group and Changqing Agrochemical have taken the initiative to lead teams abroad for comprehensive market research, providing robust support for market expansion.

When it comes to managing foreign exchange risk, companies often utilize financial instruments such as foreign exchange hedging, forward foreign exchange settlement, and sales to mitigate the effects of exchange rate fluctuations, thereby protecting their profits from volatility.

Looking ahead, listed companies in the pesticide industry will continue to encounter a range of opportunities and challenges in overseas markets. With the increasing global demand for efficient and environmentally friendly pesticides, companies with innovative products are poised to further their share in the international market through technological innovation and market expansion.

From Chaos to Order and Dependence to Innovation: The Evolution of Chinese Agrochemical Companies’ Strategies for ″Going Global″

Since China acceded to the World Trade Organization (WTO), pesticide companies have actively participated in internationalization. They have evolved from primarily exporting raw materials to adopting a diversified strategy for going global, becoming deeply integrated into the value chains of overseas end markets. Throughout this process, Chinese pesticide companies have not only secured their positions in the global market but have also achieved significant advancements in technological innovation, product enhancement, and market diversification.

For enterprises, ″going global″ goes beyond mere product exports; it is a crucial pathway for integrating into the global industrial division and enhancing international competitiveness and influence. From the perspective of the global value chain, ″going global″ can be divided into three categories: Firstly, trade-based going global, which includes product exports, the establishment of distribution networks, and OEM production. This is currently the most common form of going global for Chinese agrochemical companies, although it faces challenges such as price competition, market fluctuations, and brand vulnerabilities. Secondly, investment-based going global involves overseas investments, mergers and acquisitions, and the establishment of production bases and R&D centers. While this type of going global presents significant risks and management challenges, an increasing number of Chinese companies have been pursuing this route in recent years. Thirdly, global operations encompass comprehensive industrial chain layouts, brand management, and the establishment of regional headquarters. This approach demands strong capabilities in strategic planning, organizational management, and cultural development, representing a dynamic capability that is cultivated over the long term.

Agrochemical companies’ trade-based going global mainly has three models: Model A represents traditional export trade without registration; Model B is a registered trade model; and Model C is a localized distribution model. These three models indicate different stages of internationalization for companies, each requiring progressively more significant resources, operational capabilities, and investment commitment, highlighting the enhancement of the corporate value chain. In recent years, Chinese companies have evolved significantly through long-term investments, becoming entities that actively pursue overseas independent registrations and can establish technological barriers using patent strategies.

It is particularly noteworthy that some Chinese companies have successfully implemented the Model C approach overseas by profoundly engaging with end markets and addressing the needs of local farmers. For instance, Kesai Agrochem has cultivated the African market for many years, establishing a good reputation in markets such as Nigeria and Cameroon through the introduction of differentiated products and direct control over sales channels while continuously expanding into emerging markets like Ghana and Côte d'Ivoire. 

ACECHEM, on the other hand, focuses on the pest control needs for resistant diseases and high-value economic crops in the Vietnamese market, developing and promoting patented green microbial products tailored to local needs. After achieving success, the company replicated this experience in the Indonesian market, creating a business model driven by technology and services that stimulate the end demand. Additionally, Zibo Oasis Agroscience has collaborated with the adjuvant company Sinvochem to develop formulations resistant to rain-fastness for Philippine farmers, effectively addressing the unique planting challenges in the region.

Investment-based going global enables enterprises to acquire resources and gain control over the industrial chain through mergers and acquisitions, as well as by establishing overseas production bases and R&D centers. In recent years, the overseas investments of Chinese enterprises have primarily fallen into four categories (Table 1): resource-based investment, breakthrough investment in high-end markets, capacity investment, and supply chain investment. Furthermore, Chinese companies have adopted a ″nearshore strategy″ by setting up production bases abroad, with formulation production facilities located across Asia, South America, Africa, Europe, and North America. This approach is expected to create regional platforms that will facilitate the entry of more Chinese enterprises into local markets.

Table 1. Four categories of overseas investments of Chinese enterprises

Global operations represent an advanced stage for companies going global, necessitating the creation of a comprehensive system that includes research and development, production, and brand management. This model places considerable demands on corporate strategic planning, organizational management, and cross-cultural competencies. While this model requires substantial upfront investment and a lengthy timeline, successful implementation can yield lasting competitive advantages and a broad development space for enterprises. Currently, no domestic agrochemical company in China has fully realized global operations. However, Rainbow Agro is at the forefront of this development trajectory, showcasing its industry-leading vision and commitment.

Manufacturing Going Global

Looking ahead, the development trajectory of China's pesticide companies is crucial not only to the rise and fall of the industry but also to the microcosm of China's manufacturing sector going global. Against the backdrop of a restructured global industrial chain, Chinese manufacturing enterprises must transition from mere product exports to the export of technology, brands, and standards. By engaging in investment-driven overseas expansion and global operations, they can integrate more deeply into international markets. This requires not only sustained investment in technological research and product innovation but also strategic vision and practical capabilities in organizational management, cross-cultural integration, and global resource allocation.

Overall, the journey of China's pesticide companies offers valuable lessons for the manufacturing sector's overseas expansion. In the future, as Chinese enterprises continue to break through in technological innovation, brand building, and global layout, China's manufacturing industry is poised to capture a larger share of the worldwide market, achieving a splendid transformation from "Made in China" to "Created in China" and "Branded in China."

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