Chinese pesticide revenues up 21% in 2012

China Pesticide Industry Report ( 2012-2015) shows that chemical pesticide API (converting into active ingredient) output of China increased by 34.0% year-on-year to 3.549 million tons in 2012,with the AAGR of 19.2% between 2005 and 2012. In 2012, the operating revenue of Chinese pesticide manufacturing surged by 21.2% year-on-year to ¥ 235.7 billion, while total profit reached ¥17.5 billion, presenting a 39.2% YoY rise.



In the pesticide industry, international division of labor has been shaped, with developed countries specializing in the R&D and production of new pesticide varieties as well as the production of pesticide preparations while developing economics such as China emerging as production bases of pesticide API. The global pesticide market has been monopolized by the six industrial leaders including Syngenta, Bayer and BASF, the combined market share of which approximates 85%. There are more than 2,000 pesticide makers in China, featuring low market concentration. For example, the operating revenue of domestic industrial players in 2012 such as Zhejiang Xinan Chemical Industrial Group, NANJING RED SUN and Jiangsu Yangnong Chemical hit ¥2.8321 billion, ¥2.7252billion and ¥2.0566 billion, respectively, occupying 1.2%, 1.2% and 0.9% in terms of market share.

Chinese pesticide companies are increasingly sharpening their edges through M&As, product mix adjustment and capacity expansion. As a result of pressing environmental protection call and anti-dumping investigation, the prices of pesticide commodities such as glyphosate and pyridine derivatives has been on a stable growth, greatly benefitting pesticide producers including Zhejiang Xinan Chemical Industrial Group, NANJING RED SUN, HUBEI SANONDA, and Jiangsu Yangnong Chemical. In addition, there is a small number of enterprises in the production of minor-use pesticides, but they enjoy higher profit margin. And some domestic players, such as Huapont-Nutrichem, become suppliers of API (like metolachlor, Tebuconazole, and Azoxystrobin) for international tycoons including Bayer and BASF.