Crop protection china news 201101

Crop Protection China News

Vol.5 Issue 1. 2011 14 Jan. 2011

Copyright © CCM International Limited

Crop Protection China News Vol.5 Issue 1

Content

■ Dynamic ...............................................................................................................1
Pesticide companies in Zhejiang relocating capacity ............................................................................................1
Overview: main pesticides situation in China 2010 ............................................................................................. 2
■ Company.............................................................................................................. 3
Nantong Jiangshan to tide over glyphosate downturn by aid .............................................................................. 3
Hebei Veyong to involve in DME industry ........................................................................................................... 3
M&A: Lier Chemical and Jiangsu Kuaida ............................................................................................................. 4
Jiangsu Tianrong to relocate ................................................................................................................................. 5
■ Financing ............................................................................................................. 6
Anhui Huilong to launch IPO ................................................................................................................................ 6
Jiangsu Limin won't get listed before Chinese Spring Festival of 2011 ............................................................... 7
■ Crops ................................................................................................................... 8
China’s soybean import hits record high 2010 ..................................................................................................... 8
Average market price of main crops in China (14 Jan. 2010) .............................................................................. 9
Pest/disease forecast on rice in Jiangsu, 2011 ................................................................................................... 10
■ News in Brief ..................................................................................................... 10

Pyrethroid Pesticides - Outlook for China Glyphosate
China Crop Protection - Production and Market of Industry 2009-2014
Summit 2011 Abamectin in China - Production and Market of
Will be held during 18 - 19 - Benzimidazole Fungicide Survey Chlorpyrifos in China
March, Shanghai in China - Future Prospect of Genetically
Welcome to join with us. - World Outlook of Chlorpyrifos Modified Crops
Click here for Event Details. 2011-2015 - Fluthiacet-methyl Survey in
- China Outlook for Mancozeb China
Dynamic Database 2011-2016 - Seed Treatment Survey in China
- ValoTracer - Survey of Amide Herbicides in - Nicosulfuron Survey in China
China - Fertilizer Market in China
- Triazole Fungicides Survey in - Glycine Survey in China
China - Fipronil Survey in China
- Corn Herbicides Survey in China - MIPA survey in China
Online & real-time consulting - China Rice Insecticides Survey - Seed Survey in China
system - Acephate Survey in China CCM newsletters related to
- DETC Survey in China CP:
Coming Reports from CCM: - Insecticides China News
- Global Commercial Opportunities Ready Market Reports: - Herbicides China News
Derived from Glyphosate Industry - Production and Market of Non - Fungicides China News
- Production and Market of Crop Pesticides in China - Glyphosate China Monthly
Azoxystrobin in China - Future of Plant Growth Report
- Production and Market of Regulators in China 2010-2014

CCM International Limited II www.cnchemicals.com


Welcome to Crop Protection China News 1101. Headlines of Crop Protection
China News 1101
It is reported that China’s No.1 Document will still
focus on agricultural issue in China. The document
will enhance the water conservancy construction in
agriculture to safeguard China’s grain production. M ore and more pesticide companies in Zhejiang
Province have been relocating their pesticide
production capacities to other provinces in recent
The first document of the year, dubbed "Number.1 years.
Document" in China and jointly issued by the Central
Committee of the Communist Party of China and the
State Council, always states the future works that the
government will attach great importance to during
M ain pesticides’ demand in China witnesses steady
growth in 2010.
the year.

Although China’s grain production hits a record high
in 2010, the grain produced by China itself still fails
R ecently, Nantong Jiangshan is aided by local
government and shareholders to get through the
downturn of glyphosate.
to meet the demand. China has to import more and
more grain to fill the gap. China’s soybean import
also hits a record high in 2010, with volume of 54.80
million tonnes. Besides, China imported a large
O n 6 Jan. 2011, Hebei Veyong announces that its
transaction with ENN Energy has been approved
by CSRC.
amount of corn in 2010, the first time in recent years.

The prices of most crops witness huge increase in
2010. The prices of cotton, corn, wheat, soybean, etc.,
L ier Chemical and Jiangsu Kuaida’s M&A is
approved by CSRC.
all record high peak in history. However, domestic
peasants’ planting enthusiasm in China is rather
low at present although prices of most agricultural J iangsuTianrong starts to relocate recently.

commodities hit a record high.

Most peasants hold the view that they can earn more
by working in cities than planting crops. Besides,
R ecently, Anhui Huilong, a large chain store
company of agricultural materials, announces to
launch IPO in the near future.
the prices of agricultural production means such as
seeds, pesticides, fertilizers, etc., increase faster than
that of crops, which undermine a huge part of the
profits.
J iangsu Limin won't get listed before Chinese Spring
Festival of 2011.

To safeguard the food security in domestic market
is estimated to be one of the priorities for Chinese
C hina imports 54.80 million tonnes of soybean in
2010, hitting a record high.
government.

Location of key companies covered in this issue

RMB Exchange Rate, 14 Jan. 2011
100USA 659.89
100EUR 876.91
Source: The Bank of China (BOC)

CCM International Limited I www.cnchemicals.com


■ Dynamic
Pesticide companies in Zhejiang relocating capacity

Z hejiang Province is once the second important pesticide production base in China, but it has developed slowly in
recent years compared with other important pesticide production bases such as Jiangsu Province and Shandong
Province. More and more pesticide companies in Zhejiang Province have been relocating their pesticide production
capacities to other provinces in recent years due to the high production cost in Zhejiang.

According to CCM’s survey, over 15 pesticides companies have relocated part of their pesticide production capacities to
other provinces. Besides, many other pesticide companies are planning to relocate in the near future.

Leading pesticide companies in Zhejiang, such as Zhejiang Wynca Chemical Industry Group Co., Ltd. (Zhejiang Wynca),
Zhejiang Shenghua Biok Biology Co., Ltd. (Zhejiang Biok), Zhejiang Heben Pesticide & Chemicals Co., Ltd. (Zhejiang
Heben), Zhejiang Jinfanda Bio-chemical Co., Ltd. (Zhejiang Jinfanda), etc., all have set subsidiaries in other provinces.

“Many Zhejiang pesticide companies have invested in other provinces in recent years, but no company from other regions
invests in Zhejiang in the mean time.” reveals an insider from Zhejiang pesticide industry.

Pesticides companies in Zhejiang relocate pesticide production capacities to other provinces by building subsidiaries,
cooperating with companies in other provinces, or acquiring other pesticide companies.

They mainly relocate their technical business to other regions and their plants in Zhejiang mainly produce pesticide
formulations and part of pesticide technical.The high production cost in Zhejiang is the main reason for the relocations.
As a relatively developed region in China, the requirement for environmental protection in Zhejiang is so strict that
pesticide companies find it hard to meet the demand. Besides, the land cost is high in Zhejiang.

Different from Zhejiang Province, pesticide industry in Jiangsu and Shandong enjoys more support from the government.
They have built many pesticide industry parks and encourage pesticide companies to relocate into them. The famous
pesticide industry parks include Rudong National Industrial Park (Jiangsu), Weifang National Pesticide Industrial Zone
(Shandong) and Rudong Yangkou Chemical Industrial Park (Jiangsu).

Besides Jiangsu and Shandong, Hubei, Jiangxi, Anhui, etc., also have built some pesticides industry parks to encourage
pesticide companies to relocate.

With the increasing pressure from environmental protection and land cost, it is estimated that more and more pesticide
companies in Zhejiang Province will relocate their pesticide production capacities to other provinces.

The relocation is expected to bring more chances to the company’s further development. Additionally, pesticide
manufacturers can take this opportunity to upgrade production technology and optimize product structure during the
relocation, thus strengthening competitiveness in the market.

Zhejiang has dropped to the third important pesticide production base in China at present, after Jiangsu and Shandong.
There are 84 pesticide production companies (including 51 technical pesticide companies) in Zhejiang by the end of 2010,
decreasing from 92 by the end of 2009.

TABLE 1: Pesticide companies in Zhejiang relocate capacity to other regions

Company Location of its subsidiary Remark on its subsidiary

Zhejiang Wynca Zhenjiang City, Jiangsu Mainly for glyphosate

Zhejiang Biok Inner Mongolia Mainly for avermectin

Zhejiang Heben Rudong City, Jiangsu With investment of USD34.74 million

Zhejiang Yongnong Laizhou City, Shandong Launched in March 2010

Zhejiang Jinfanda Hubei and Jiangxi For PMIDA and other fine chemicals

Hangzhou Qingfeng Xuancheng City, Anhui With investment of USD5.74 million

Sinochem Ningbo Ltd. Lianyungang City, Jiangsu Propiconazole, tebuconazole, etc.

Zhejiang Yifan Jiangsu Covering 15.3 ha.

Note: Zhejiang Yongnong Chem. Ind. Co., Ltd. (Zhejiang Yongnong); Zhejiang Jinfanda Bio-chemical Co.,
Ltd., (Zhejiang Jinfanda); Hangzhou Qingfeng Agrochemical Co., Ltd. (Hangzhou Qingfeng); Zhejiang Yifan
Chemicals Co. Ltd. (Zhejiang Yifan)
Source: CCM International

CCM International Limited 1 www.cnchemicals.com


Overview: main pesticides situation in China 2010

W ith slight recovery in domestic pesticide industry in
2010, the output of pesticide witnesses continuous
growth, predicted to exceed the output in 2009, about
herbicides is converting to the new products with high
effect, low toxicity and low dosage.

2.26 million tonnes. Although the output of pesticide in The demand for mainstream herbicides, like alachlor,
China continuously enlarges in 2010, domestic demand butachlor, acetochlor, atrazine and trifluralin, inordinately
and price, on the contrary, see slide. The domestic decreases in 2010 due to the promotion of foreign
consumption and export of pesticide are still far less than herbicides and off-patent herbicides.
the output in 2010 and overcapacity condition still exists.
Nicosulfuron, an off-patent herbicide, has become one of
The phenomenon in domestic pesticide market in 2010 the hot herbicides in China since 2007 when its patent
better explains the bad performance of most pesticide expired. Nicosulfuron has been in short supply in most of
players in China in the same period, such as overcapacity, the peak season in recent years. So far, there are more than
production cost increased by the policy of environmental 26 enterprises registered the production of nicosulfuron
protection, RMB appreciation, abnormal weather, impacts in China, with total capacity of more than 2,000t/a.
from foreign pesticides with better quality and efficiency, Moreover, Hefei Fengle Seed (Group) Co., Ltd., a listed
etc. seed company in China, also announced to build a 500t/a
nicosulfuron production line in 2010.
The main trend is that the demand for highly effective
and lowly toxic pesticides is increasing, although there are However, overcapacity and intense competition are still the
differences among insecticde, fungicide and herbicide. dominant themes of herbicide industry in 2010. Financial
crisis, abnormal weather, descending planting passion of
Insecticide peasants all affected the demand for glyphosate, acetochlor
and atrazine.
The consumption of insecticide in 2010 witnesses decrease,
in some places even seeing 30% decline according to junior Fungicide
crop protection officers.
The demand for fungicide witnesses growth in 2010,
With China strongly limiting highly toxic pesticides in especially highly effecient and lowly toxic ones, ascribed
domestic market, the output of some organophosphorus to abnormal weather as well as adjustment of agricultural
insecticides witnesses slide in 2010, such as phorate, planting structure.
isocarbophos, isofenphos-methyl, terbufos, etc. Along
with the large promotion of pest-resistant cotton in China Triazole fungicides stage good sales in 2010, aided by
recently, the occurrence of cotton bollworm, cotton spider more serious occurrence of rice diseases, such as sheath
mite has been controlled, leading to slide in the usage of blight, false smut and rice blast on the middle and late
profenofos insecticides in 2010. rice in China, for about 19.2 million ha. The demand for
thiophanate-methyl, carbendazim, zineb and bordeaux is
Overcapacity still baffles domestic chlorpyrifos players also increased by the serious occurrence of vegetable and
in 2010. China’s chlorpyrifos capacity in 2010 reaches fruit diseases in 2010.
116,000t/a, however, domestic demand and export of
chlorpyrifos are just 18,100 tonnes and 19,800 tonnes Moreover, some imported fungicides, such as Armure
(estimated based on the data from Jan. to Oct. 2010). This (Syngenta), Cuproxat (Nufarm), Horizor (Bayer) and
condition has caused deficit of many chlorpyrifos players Dithane (Dow), become the hot products in China 2010.
in China.
Outlook
On the other hand, owing to the prohibition of the five
kinds of highly toxic pesticides and the phase out of Total amount of pesticide demand in China will hit
fipronil since 1 Oct. 2009, the demand for highly toxic 310,000 tonnes (converted into 100% purity) in 2011
pesticide alternatives, such as pymetrozine, chlorpyrifos, according to predicted data from crop protection stations
abamectin, emamectin, acetamiprid, has correspondingly of 31 provinces (including autonomous regions and
increased. municipalities), up 2.69% compared with 2010.

Insecticides which are largely consumed in domestic Domestic demand for insecticides in 2011 will come to
market in 2010 include dichlorvos, phoxim, buprofezin, 124,900 tonnes, down 1.43% compared with 2010. The
trichlorfon, dimethoate, isoprocarb, bisultap, chlorpyrifos, demand for herbicide and fungicide will reach 97,500
cyhalothrin, abamectin, etc. tonnes and 72,800 tonnes respectively in 2011, up 9.33%
and 2.94% respectively over 2010.
Herbicide

Generally speaking, the demand and consumption of
herbicide in 2010 witness stable growth attributed to
increasing application area, change of agricultural planting
structure and business model, etc. Domestic usage of



■ Company
Nantong Jiangshan to tide over glyphosate downturn by aid

N antong Jiangshan Agrochemical & Chemicals Co., Ltd. (Nantong Jiangshan), a large listed pesticide enterprise in
China (Code No. 600389) revealed the completion of some of its new pesticide production lines, 38,000t/a 41% AS
of glyphosate, 20,000t/a 62% AS of glyphosate and 12,000t/a technical of PMIDA, and a 30,000t/a glyphosate technical
production line and some other formulation production lines to be finished. The desire for capital may be the most
important thing for Nantong Jiangshan at present.

After serial hard work on negotiations, the company finally receives the help from its shareholders and local government.

On 2 Dec. 2010, Nantong Jiangshan revealed to sell 19.65% equity of Nantong Jiangtian Chemicals Co., Ltd. (Nantong
Jiangtian), a chemical subsidiary of it. The total capital involved in the transaction reached USD3.22 million. After the
transaction, Nantong Jiangshan’s shareholding ratio of Nantong Jiangtian dropped to 22.23% from the previous 41.88%.

Later on 7 Dec. 2010, Nantong Jiangshan received a categorical grant from local government of about USD21.15 million,
aiming to compensate the loss of one year’s production suspension of some production bases in Nantong Jiangshan.

On 11 Jan. 2011, Nantong Jiangshan announces that it will receive a no more than USD45.32 million’s loan from its
shareholders, SinoChem International Corporation (SinoChem International), aiming to meet its financial needs in 2011.
SinoChem International will provide the loan indirectly through bank.

The company announced that the capital involved in these events will be counted in the loss and gain of 2010; thus, the
net profit of 2010 is predicted to grow.

Nantong Jiangshan as one of the largest glyphosate players in China is also the most serious affected company among the
listed glyphosate players in China who have suffered the downturn of glyphosate since H2 2008.

Nantong Jiangshan is mainly engaged in the production and sales of glyphosate, dichlorvos and other fine chemicals.
So far, the technical capacity of glyphosate in Nantong Jiangshan reaches 70,000t/a. It is the second largest glyphosate
player in China while the first one is Zhejiang Wynca Chemical Industry Group Co., Ltd. with glyphosate technical
capacity of 80,000t/a in 2010.

According to H1 2010 financial report of Nantong Jiangshan, the revenue of glyphosate reaches USD81.12 million,
accounting for 48.82% of its total revenue. However, profit margin of glyphosate in this period is just 1.91%, down 3.81%
over H1 2009.

Dragged by glyphosate, Nantong Jiangshan firstly predicted its net profit of 2010 to be deficit after it released its Q1-Q3
financial report. However, owing to frequent moves on financial transaction recently, on 11 Jan. 2010, Nantong Jiangshan
predicts net profit of 2010 to grow.

It is still hard to predict how Chinese glyphosate market will be in 2011. According to the analysis by CCM, although
growth rate of glyphosate may stay at 5%-10% in the next 5-10 years due to no better substitute developed, it can’t catch
up with the growth rate few years ago. More intense competition will continue to be the main theme in the global market
in 2011.

Hebei Veyong to involve in DME industry

O n 6 Jan. 2011, Hebei Veyong Bio-Chemical Co., Ltd.
(Hebei Veyong), the biggest abamectin player in
China, announces that its transaction with ENN Energy
(Xinneng Bengbu) to involve in the production and sales
of methoxymethane (DME), a kind of raw material of
pesticide.
Holding Limited (ENN Energy), a Chinese energy group
listed on Hong Kong Exchanges and Clearing Limited, has After the transaction, 75% equity of Xinneng Zhangjiagang
been approved by China Securities Regulatory Commission and 100% equity of Xinneng Bengbu will be controlled
(CSRC). by Hebei Veyong with the total cost of about USD83.12
million.
According to Hebei Veyong, it will acquire large equity
of ENN Energy’s two wholly owned subsidiaries, namely However, the transaction will not be dealt in cash. Hebei
Xinneng Energy Zhangjiagang Co., Ltd. (Xinneng Veyong intends to issue equivalent A shares to ENN Energy,
Zhangjiagang) and Xinneng Energy Bengbu Co., Ltd. about 75.39 million shares, accounting for 24.18% of its



total equity. Till then the total shares of Hebei Veyong will reported to CSRC to get approval according to Measures
finally come to about 311.83 million. for Administration of Material Assets Reorganization of
Listed Companies, which came into force on 18 May 2008.
In recent years, DME has been publicly known in the world
as one of the clean energies and high-quality chemical Hebei Veyong believes it is the right choice to purchase
raw materials. In China DME is largely used to be mixed DME capacity from ENN Energy since the rising prices
in liquefied petroleum gas (LPG) and produce chemicals. of raw materials and energy have been one of the main
Although it is calculated that domestic capacity of DME reasons to drag down its net profit growth in 2007 and
has reached 6,500,000t/a to 8,000,000t/a in 2010, most 2008, down 46.24% and 49.31% respectively year on year.
of DME players' operating rates are less than 20% due to With the large capacity Hebei Veyong involved, it will
the impact of global financial crisis and the large-scale bring down its total cost of raw materials.
nationwide campaigns on regulating LPG in June 2010.
Moreover, as more and more strict policies on cleaner
Actually, eyeing the great prospects of DME in the future, production have been continuously carried out by Chinese
Hebei Veyong started negotiating the acquisition proposal government, DME will see great opportunity in China and
with ENN Energy early on 26 Aug. 2008. Later on 15 Oct. the sales of DME will finally bring profit to Hebei Veyong.
2008, after about two months' negotiation, both sides
finally reached an agreement. For the past two years, the Hebei Veyong, founded in 1992, is the first Hebei-based
transaction plan is under evaluation and government’s enterprise to get listed. Hebei Veyong is a comprehensive
investigation. company that applies itself to R&D, production and
sales of pesticide formulations. Currently, the company’s
Owing to the net assets involved in this transaction main products include abamectin, paraquat, emamectin
exceeding USD7.54 million and surpassing 50% of Hebei benzoate, imidacloprid, etc.
Veyong's net assets in 2009, the transaction has to be

FIGURE 1: Hebei Veyong’s sales and net profit, 2006~Q1-Q3 2010

Source: Hebei Veyong’s financial reports from 2006 to Q1-Q3 2010

M&A: Lier Chemical and Jiangsu Kuaida

O n 30 Dec. 2010, Lier Chemical Co., Ltd. (Lier Chemical), the largest chloropyridine herbicide player in China,
releases that its reorganization with Jiangsu Kuaida Agrochemical Co., Ltd. (Jiangsu Kuaida), a high-tech pesticide
company in Jiangsu Province, has been approved by China Securities Regulatory Commission (CSRC).

According to Lier Chemical, Lier Chemical will pay approximately USD25.64 million to obtain 64,384,898 stakes of
Jiangsu Kuaida, accounting for 51% equity of Jiangsu Kuaida.

Different from normal acquisitions among listed companies, the M&A between Lier Chemical and Jiangsu Kuaida is
considered as a major assets reorganization of Lier Chemical due to the high purchasing price.

Lier Chemical is very exited about the M&A with Jiangsu Kuaida and is also confident of its business performance after
the transaction. Lier Chemical predicts that its revenue is to witness 100% growth in 2011 and net profit to achieve 30%
to 50% growth in H1 2011.

Actually, aiming to reduce the risk of single production structure and seize the opportunity to merge advantage
enterprises with complementary businesses, Lier Chemical launched the proposal of M&A with Jiangsu Kuaida on 28
April 2010 and it is considered to be the first reorganization announcement in pesticide industry in 2010. After serial
months' audit and investigation, CSRC finally approves the transaction.

So far, Lier Chemical is mainly engaged in the technical production and export of chloropyridine herbicides. Although
it struggles to enlarge the formulation sales in domestic market, the terminal market sales of formulations still witness



undergrowth. The global market revenue of Lier Chemical in H1 2010 reaches USD33.96 million, about 5.5 times more
than the revenue in domestic market.

Jiangsu Kuaida obtains diversified pesticide production capacities, with over seventy pesticide products including
herbicides, fungicides and insecticides. According to Lier Chemical, the largest attraction of Jiangsu Kuaida is its excellent
performance in domestic market.

With serial decades' development in domestic pesticide market, Jiangsu Kuaida owns rich domestic market resources
and its sales network covers large areas of China. Over 800 agents are distributed in many large agricultural provinces,
such as Heilongjiang Province, Shandong Province, Jiangsu Province, Hunan Province, Hubei Province, Anhui Province,
etc. With the continued recovery of domestic pesticide market in 2011 and the cooperation with Jiangsu Kuaida, Lier
Chemical’s performance in domestic market is believed to witness huge growth in 2011.

Moreover, Lier Chemical’s herbicide business will be largely strengthened after the M&A, as the two companies are both
strong in herbicide industry. Among Jiangsu Kuaida’s pesticide business, sales of herbicide is the largest, accounting for
over 80% of the total revenue. Although it has suspended glyphosate’s production due to the continuously depressed
price of glyphosate in the world. The equipment for glyphosate production is still under normal maintenance and will
resume production as soon as the price of glyphosate recovers.

Lier Chemical, founded in 1993 by China Academy of Engineering Physics, is a Sino-foreign joint venture mainly engaged
in research and development, production, application and sales of agrochemicals. It is famous for chloropyridine
herbicide production in China. It's revenue in Q1-Q3 of 2010 hits USD54.68 million, up 10.18% year on year and net
profit in this period reaches USD10.42 million, down 25.02% year on year.

Jiangsu Kuaida, entirely reformed from Rudong Pesticide Factory, is a comprehensive pesticide and chemical enterprise.
It is the largest substituted urea herbicide production base (diuron, isoproturon, chlortoluron, linuron, fluometuron,
etc.) in China, with I/E license. At present, it mainly produces fifty kinds of products, including three series of pesticides
(herbicides, insecticides and bactericides), acyl chloride series of intermediates (for pesticide, medicine and dye) and a
series of phosgenation intermediates (for pesticide, medicine and dye), etc.

TABLE 2: Pesticide performance of Jiangsu Kuaida, H1 2010

Product Type Capacity, t/a Output, tonnes Sales, million USD

technical 9,600.00 3,011.73 168.81
Herbicide
formulation 12,900.00 3,324.09 6.37
technical 400.00 170.87 1.93
Fungicide
formulation 500.00 135.56 1.10
technical 3,100.00 465.00 1.86
Insecticide
formulation 5,000.00 687.52 0.74
Source: Major assets acquisition report of Lier Chemical

Jiangsu Tianrong to relocate

J iangsu Tianrong Group Co., Ltd. (Jiangsu Tianrong),
an outstanding pesticide player in China, launches its
relocation plan recently.
Jiangsu Tianrong is temporarily predicted to reach about
100,000t/a till then.

“The capacity will be definitely expanded, but accurate data
According to an insider from Jiangsu Tianrong, the of how much it will be after the construction is still not
relocation will last until Nov. 2011 due to its large-scale clear. We shall decide according to the 12th Five-Year Plan
construction of the new factory. Under the great pressure (2011-2015). And we will also add some new products; they
from Pesticide Industry Policy which carried out last are also not decided yet.” says the insider.
year aiming to crack down on domestic chaotic pesticide
industry, the company decides to wholly relocate into Actually, a subsidiary of Jiangsu Tianrong, namely Jiangsu
Xiangshui Chemical Industrial Park (Yancheng City, Lulilai Co., Ltd. (Jiangsu Lulilai), a large herbicide player
Jiangsu Province). with total capacity of 20,000t/a, has already started to
relocate into the industrial park since 2010.
The total investment in this relocation will reach
USD123.10 million and some of the new production lines Jiangsu Tianrong has planned to wholly relocate in
are now under construction. The old factories are still 2010, but it decided to relocate separately by different
under production until the new production lines are to subsidiaries due to the large projects and capital investment
be completed at the end of 2011. The total capacity of involved. This year, another subsidiary of Jiangsu



Tianrong will also launch relocation, namely Jiangsu Ruihe including three production companies, one trade company
Chemical Co., Ltd., which is mainly engaged in herbicide and one research company, namely Jiangsu Tianrong,
production. The relocation of the rest subsidiaries will be Jiangsu Ruihe Chemistry Co., Ltd., Jiangsu Zhongyi Co.,
conducted in the following years. Ltd., Jiangsu Tianrong International Trade Co., Ltd. and
Liyang Tianrong Research Institute Co., Ltd. Jiangsu
According to the insider, aiming to raise funds to increase Tianrong is the mother company of the rest subsidiaries.
the competition strength and further expand the business
range, Jiangsu Tianrong intends to get listed in 2011. It Jiangsu Tianrong, with total assets of USD22.66 million,
has submitted application to China Securities Regulatory is reorganized from Jiangsu Liyang Chemical Factory. Its
Commission (CSRC) in 2010. CCM will pay close attention average annual revenue in recent years reaches USD75.53
to the IPO process in the future. million. It is famous for the production and research on
nereis toxins insecticides and sulfonylurea herbicides in
Jiangsu Tianrong Group, locates in Nanjing City of Jiangsu China and is estimated to be the largest player of these
Province, is a large high-tech group composed of pesticide pesticides in domestic pesticide industry.
production (main business), international trade and
package printing, etc. It now owns five large subsidiaries,

TABLE 3: Capacity of main pesticides of Jiangsu Tianrong after relocation
Product Capacity, t/a Product Capacity, t/a

Monosultap 11,000 Metsulfuron 200

Bisultap 12,450 Chlorsulfuron 100

Cartap 6,000 Chlorimuron-ethyl 100

Thiocyclam-hydrogenoxalate 200 Tribenuron 200

Beta-cypermethrin 100 Ethametsulfuron 100

Bifenthrin 100 Pyridine-ethyl 200

Quizalofop-P-ethyl 300 Bensulfuron 300

Fenoxaprop-P-ethyl 1,000 Nicosulfuron 300

Other formulations and by-products 67,350 - -

Total 100,000 - -
Source: Jiangsu Tianrong

■ Financing
Anhui Huilong to launch IPO

R ecently, Anhui Huilong Agricultural Means of Production Co., Ltd. (Anhui Huilong), a large chain store company of
agricultural materials in Anhui Province, releases prospectus aiming to launch IPO in the near future.

Anhui Huilong intends to get listed on Shenzhen Stock Exchange A share market and offer 37.5 million shares to public.
After the offering, Anhui Huilong’s total shares will reach 149.5 million. However, the price of each share and the accurate
IPO date are still under discussion.

According to Anhui Huilong, the raised funds in the IPO will be invested in the building of new distribution centers and
information system, aiming to build up 20 standardized distribution centers in China. Ten of these 20 standardized
distribution centers will be built inside Anhui Province and others will be built elsewhere. Total investment of the two
projects is estimated to be USD61.06 million, including USD56.17 million invested in the construction of new distribution
centers and USD4.89 million invested in the building of information system.

Anhui Huilong is mainly engaged in chain operation of major agricultural materials, such as fertilizer, pesticide, seed,
etc., especially fertilizer (annual sales volume of over 1.8 billion tonnes in recent years). With years’ development, Anhui
Huilong has built up 56 standardized distribution centers and over 2,300 chain stores in nine main agricultural material
consumption provinces, such as Heilongjiang Province, Jilin Province, Henan Province, Jiangsu Province, etc. The
revenue and net profit of Anhui Huilong in Q1-Q3 2010 mounts to USD635.39 million and USD14.24 million respectively.

If the IPO of Anhui Huilong is successfully launched, it will become the first chain store company of agricultural materials
to get listed since 2010. With the exemplary role Anhui Huilong takes, more and more chain store companies may resort
to getting listed in the near future. Some domestic influential chain store companies obtain the capability to get listed,



especially for Huiwanjia Agriculture Capital Chain Co., Ltd. and Guangdong Tianhe Agricultural Means of Production
Co., Ltd., which have announced to get listed in 2011 or 2012.

It is incompletely estimated that at present there are more than 4,000 chain store companies of agricultural materials in
China, largely increased since the first one appeared in 2000. Chinese government has given large support to this kind of
operation modes and continuously issued related supportive policies, such as the “China's No.1 Document” in early 2010.
However, the current chain store mode accounts for merely 20% market share in China, much lower than the mainstream
ways that agricultural materials being distributed by dealers.

As the complex circulation of the traditional sales mode pushing up the cost of circulation, especially the rail transport
cost raised in 2009, more and more agricultural material companies start to do everything possible to cut down the cost
in circulation. With advantage in cutting processing links of circulation, agricultural materials’ price can be reduced,
which shows great competitiveness in domestic market, bringing great opportunities to chain store mode. It is foreseeable
that under the support of government and led by leading enterprises, chain store mode will gradually become the
mainstream in current industry of agricultural materials.

TABLE 4: Large chain store companies in China
Company

Jinxiu Qiancun Agricultural Materials Sales (Chains) Co., Ltd.

Xiyangyang Agricultural Materials Sales (Chains) Co., Ltd.

Huiwanjia Agriculture Capital Chain Co., Ltd.

Shandong A&fine Agricultural Materials Co., Ltd.

Zhejiang Taizhou Nongzi Co., Ltd.

Shaanxi Limin Agricultural Materials Sales (Chains) Co., Ltd.

Guangdong Tianhe Agricultural Means of Production Co., Ltd.

Jiangsu Limin won't get listed before Chinese Spring Festival of 2011.

J iangsu Tianrong Group Co., Ltd. (Jiangsu Tianrong),
an outstanding pesticide player in China, launches its
relocation plan recently.
with total capacity of 20,000t/a, has already started to
relocate into the industrial park since 2010.

Jiangsu Tianrong has planned to wholly relocate in
According to an insider from Jiangsu Tianrong, the 2010, but it decided to relocate separately by different
relocation will last until Nov. 2011 due to its large-scale subsidiaries due to the large projects and capital investment
construction of the new factory. Under the great pressure involved. This year, another subsidiary of Jiangsu
from Pesticide Industry Policy which carried out last Tianrong will also launch relocation, namely Jiangsu Ruihe
year aiming to crack down on domestic chaotic pesticide Chemical Co., Ltd., which is mainly engaged in herbicide
industry, the company decides to wholly relocate into production. The relocation of the rest subsidiaries will be
Xiangshui Chemical Industrial Park (Yancheng City, conducted in the following years.
Jiangsu Province).
According to the insider, aiming to raise funds to increase
The total investment in this relocation will reach the competition strength and further expand the business
USD123.10 million and some of the new production lines range, Jiangsu Tianrong intends to get listed in 2011. It
are now under construction. The old factories are still has submitted application to China Securities Regulatory
under production until the new production lines are to Commission (CSRC) in 2010. CCM will pay close attention
be completed at the end of 2011. The total capacity of to the IPO process in the future.
Jiangsu Tianrong is temporarily predicted to reach about
100,000t/a till then. Jiangsu Tianrong Group, locates in Nanjing City of Jiangsu
Province, is a large high-tech group composed of pesticide
“The capacity will be definitely expanded, but accurate data production (main business), international trade and
of how much it will be after the construction is still not package printing, etc. It now owns five large subsidiaries,
clear. We shall decide according to the 12th Five-Year Plan including three production companies, one trade company
(2011-2015). And we will also add some new products; they and one research company, namely Jiangsu Tianrong,
are also not decided yet.” says the insider. Jiangsu Ruihe Chemistry Co., Ltd., Jiangsu Zhongyi Co.,
Ltd., Jiangsu Tianrong International Trade Co., Ltd. and
Actually, a subsidiary of Jiangsu Tianrong, namely Jiangsu Liyang Tianrong Research Institute Co., Ltd. Jiangsu
Lulilai Co., Ltd. (Jiangsu Lulilai), a large herbicide player Tianrong is the mother company of the rest subsidiaries.



Jiangsu Tianrong, with total assets of USD22.66 million,
is reorganized from Jiangsu Liyang Chemical Factory. Its
average annual revenue in recent years reaches USD75.53
million. It is famous for the production and research on
nereis toxins insecticides and sulfonylurea herbicides in
China and is estimated to be the largest player of these
pesticides in domestic pesticide industry.

TABLE 5: Capacities of key pesticide technicals of Jiangsu Limin in 2010
No. Fungicide Capacity, t/a
1 Mancozeb 20,000
2 Chlorothalonil 7,000
3 Cymoxanil 1,000
4 Metam-sodium 5,000
5 Propineb 5,000
6 Fosetyl-Al 2,000
7 Difenconazole 100
8 Azoxystrobin 100
9 Thiacloprid 500
Source: Jiangsu Limin

TABLE 6: New production lines of Jiangsu Limin to be constructed after IPO

No. Fungicide Capacity

1 Pyrimethanil 500t/a technical and SC formulation

2 Cymoxanil 2,000t/a technical and WDG formulation

3 Azoxystrobin 100t/a technical and WDG formulation

4 Folpet 2,000t/a technical and WDG formulation

Source: Jiangsu Limin

■ Crops

China’s soybean import hits record high 2010

A ccording to statistics that China Customs released on 10 Jan. 2011, China imports 54.80 million tonnes of soybean
in 2010, up 12.25 million tonnes over 2009 which was 42.55 million tonnes. The soybean import volume in 2010 is
the highest in history. Insiders from domestic soybean industry expect that the soybean import volume will continue to
increase in 2011, but the growth rate will see decline.

China’s soybean import volume has witnessed continuous increase since 2005, but the increase volume in 2010 is the
biggest, with the grow rate of 28.78%. The increase volume first exceeds 10 million tonnes.

The huge increase in the soybean import is first attributed to China’s restriction on soybean oil from Argentina in 2010.
Before 2010, China usually imports about 1 million tonnes to 2 million tonnes of soybean oil from Argentina every year.

Since China restricted the import of soybean oil from Argentina in 2010, it had to import more soybeans to meet the oil
demand in domestic market. China imports 6.87 million tonnes of plant oil in 2010, 1.29 million tonnes less than that in
2009. If China uses soybean to fill gap, it has to import about 7 million tonnes more of soybean, as the oil content of the
soybean is about 19%.

Besides, oil demand is very strong in China and soybean oil has become the most important edible oil in domestic market.
It is estimated that domestic’s soybean crush capacity will exceed 100 million tonnes annually by the end of 2011.



It is expected that the soybean import volume will keep an uptrend in 2011, but the growth rate will witness some
decrease. First, China has stopped the restriction on import of soybean oil from South America, so the import of soybean
oil may witness some increase in 2011, which would reduce the dependence on the import of soybean. Besides, Chinese
government reserved a batch of soybean in 2008. The government may sell this batch of soybean in 2011.

However, China will become more and more dependent on imported agricultural commodities. The planting area in
China is limited, but the demand for agricultural commodities has witnessed huge increase in recent years.

What makes things worse is that the planting enthusiasm in China is low at present although China has implemented
some subsidies for agricultural production and the prices of agricultural commodities are increasing. Most peasants think
that they can earn more by working in cities than planting crops. Besides, the prices of agricultural production means
such as seeds, pesticides, fertilizers, etc., increase faster than that of crops, which reduces a big part of the profit.

As for the domestic soybean industry, things are even worse. Domestic peasants are more like to plant corn and wheat
because soybean is a less profitable crop than wheat or corn in China.

FIGURE 2: China’s soybean import volume, 2005 to 2010

China Customs

Average market price of main crops in China (14 Jan. 2010)
14-Jan-11 31-Dec-10 Jan-10
Crops
USD/t RMB/t USD/t RMB/t USD/t RMB/t
Wheat 321 2,118 323 2,128 292 1,997
Corn 297 1,958 295 1,947 255 1,744
Soybean(oil) 641 4,233 660 4,350 580 3,962
Soybean(food) 750 4,950 766 5,050 659 4,500
Peanut 1,394 9,200 1,381 9,100 1,171 8,000
Indica rice 505 3,330 501 3,300 442 3,020
Japonica Rice 595 3,926 586 3,860 470 3,210
Rapeseed 591 3,900 645 4,250 578 3,950
Broomcorn 305 2,010 316 2,080 307 2,100



Pest/disease forecast on rice in Jiangsu, 2011
Crop Main pests/diseases Occurrence area, ‘000 ha. Occurrence time
Rice leaf roller 4,066 2011
Rice plant hopper 5,000 2011
Rice stem borer 866 2011
Rice walker 666 2011
Rice
Rice blast 533 2011
Rice sheath blight 2,133 2011
Rice black-streaked dwarf 333 2011
Rice false smut 1,000 2011

■ News in Brief

Jiangsu Anpon initiates ionic membrane caustic soda production
Jiangsu Anpon Electrochemical Co., Ltd. (Jiangsu Anpon), one of the leading pymetrozine producers in China, has
launched its 200,000t/a ionic membrane caustic soda project in 25 Dec. 2010. The project was started in 2007, but it
was delayed by the global financial crisis in 2008. Jiangsu Anpon restarted the project in 2009 and the project was finally
completed in 2010.

Freezing rain and snow impacts greenhouse vegetable production
Freezing rain and snow has hit Hunan, Chongqing and Guizhou, etc. since 1 Jan. this year. The low temperature caused
by the freezing rain and snow has impacted the agricultural production in these regions, especially the greenhouse
vegetable production.

A batch of illegal isocarbophos found in Hainan
Hainan Industrial and Commercial Bureau recently found 600 bottles of isocarbophos in Haikou City, Hainan Province.
"Isocarbophos was banned for use in Hainan Province. The offender will be punished according to law. The maximum
penalty for the logistics company is USD7,550 and the maximum penalty for the owner of the pesticide is USD4,530."
Hainan Industrial and Commercial Bureau reveals.

Chemical pesticide output achieves new peak
According to statistics from National Bureau of Statistics of China, the output of chemical pesticides hits record high of
2.49 million tonnes in the first 11 months of 2010, up 20.6% year on year. Among the total, the output in Oct. 2010 is 0.25
million tonnes, up 22.2% year on year.

Output of chemical fertilizers sees increase
According to statistics from National Bureau of Statistics of China, the output of chemical fertilizers in the first 11 months
of 2010 is 61.54 million tonnes, up 4.7% year on year. Among the total, the output in Oct. 2010 is 5.66 million tonnes, up
4.3% year on year.

Lier Chemicals 2010 net profit down 23.20%
c
Lier Chemical Co., Ltd. releases its 2010 financial report on 13 Jan. 2011. The company’s sales revenue is USD69.09
million in 2010, up 15.74% year on year, but its net profit decreases by 23.20% year on year to USD11.77 million. The
company revealed that net profit in 2010 is low because it reduced the price of part of its products to enhance sales in the
market. Besides, marketing cost of the company witnesses some increase in 2010.



Jiangsu Yunfan to build new production lines
Jiangsu Yunfan Chemical Co., Ltd. plans to build some pesticide production lines in the near future, including 200t/
a fipronil technical, 200t/a glufosinate technical, 200t/a fenamiphos technical, 200t/a bromacil technical, etc. These
projects are under Environment Impact Assessment at present.

Global market value of biological pesticides to largely increase
It is predicted that global market value of biological pesticides will reach about USD2.8 billion around 2015 driven by the
large usage growth of biological pesticides in the world, especially in Europe and America.

Serious drought attacks North China
Serious drought attacks North China on 12 Jan., including nine provinces/regions in this area such as Shandong, Henan,
Hebei, etc. There is no rain in Beijing for at least four months and the winter wheat and animals in Beijing have suffered
greatly.

It is predicted that the drought will carry on in the next ten days.


CCM International Limited
17th Floor, Huihua Commercial & Trade Building, No.80 Xianlie Zhong Road
Guangzhou, 510070, P.R.China
Tel:+86-20-37616606
Fax:+86-20-37616968
E-mail: econtact@cnchemical.com
Website: www.cnchemicals.com

Crop protection china news 201101

Recomendados

Recomendados

Mais conteúdo relacionado

Semelhante a Crop protection china news 201101

Semelhante a Crop protection china news 201101 (20)

Mais de CCM Intelligence

Mais de CCM Intelligence (20)

Último

Último (20)

Crop protection china news 201101