Glyphosate China Monthly Report 1508(12 issues per year)

Date: 2015-09
Pages:29
Price:

“Business transformation: secret of surviving in great reshuffle of pesticide industry

Great changes have taken place in current pesticide market. For instance, e-commerce related to agricultural means of production starts to seize the market, the number of large-sized farming households is on the rise, the environmental pressure is mounting and enterprises launch cross-industrial M&As. All these new trends and changes further intensify the competition among pesticide enterprises. Together with the increasing costs in raw materials, transportation, labor force and management, the profit margin in the pesticide industry is significantly squeezed. Therefore, involved pesticide enterprises have to rethink their own orientations and future development. How to continue to take up a certain market shares in this great reshuffle? Many pesticide enterprises have actively made transformation from single production-marketing businesses to provide more professional and comprehensive agricultural services and set foot in many fields to seek more profit growth points.

Jiangsu Good Harvest-Weien Agrochemical Co., Ltd. (Good Harvest-Weien), a major glyphosate enterprise in China, is planning to become a service provider for pesticide and agricultural technology from an agrochemical enterprise when facing the new trend and the new challenge. In July 2015, Good Harvest-Weien disclosed that it has laid out its future businesses in seven major sections including soil conditioners, seeds, chemical fertilizers, biological fertilizers, chemical pesticides, biopesticides and agricultural and sideline products. The company is going to be a technological service provider for the overall agricultural production chain with the supports of technologies and e-commerce services. It will initiate the e-commerce plan from developing the customization marketing for agricultural products, aiming to transform itself from the traditional agrochemical businesses into an comprehensive service provider concerning agricultural technologies. Having positioned itself as a specialized manufacturers for high-end glyphosate for many years, Good Harvest-Weien has achieved a revenue of nearly USD228.87 million (RMB1.4 billion) in 2014 based on its specialized and fine glyphosate and has become a leading glyphosate manufacturer. At present, Good Harvest-Weien has publicized phenazine-1-carboxylic acid, validamycin鈥acillus cereus these biopesticides and new products of the “”Good Harvest Tree”” series. Besides, the company is integrating advantageous resources in the industry and cooperating with some research institutions and enterprises, focusing on multi-field layouts. It joins hands with Chinese Academy of Agricultural Sciences to establish a R&D center, devoting to the development and application of soil conditioners. Also, it cooperates with Shanghai Nongle Biological Products Co., Ltd. to develop and produce biopesticides. The company even invested in Beijing JingGeng TianXia Agricultural Science and Technology Co.,Ltd. to develop and produce biological fertilizers. In the cooperation with East China University Of Science and Technology, Good Harvest-Weien developed internationally advanced new microbial pesticide, such as paenibacillus polymyxa and bacillus marinus to solve the soil-borne diseases and continuous cropping obstacles.
In recent years, Zhejiang Wynca Chemical Industry Group Co., Ltd. (Zhejiang Wynca), a leading enterprise in China’s glyphosate industry, has also vigorously expanded its industrial chain and businesses in related industrial fields, such as conventional breeding, microcredit, mineral resources and operating lease. In H1 2015 alone, Zhejiang Wynca has taken three major measures in strengthening its businesses in the fields of agriaviation, internet financing and financial leasing. For example, Zhejiang Wynca invested in Anyang Quanfeng Aviation Crop Protection Technology Co., Ltd. and meanwhile jointly set up Nongfeike Agricultural Science and Technology Service Co., Ltd. Moreover, it invested and established Wynca Micro-credit Service Co., Ltd., an online financial service platform, and Shanghai Xinjiu Financial Lease Co., Ltd. to enhance the profits of leasing businesses (for more information, please refer to Glyphosate China Monthly Report 1506: Zhejiang Wynca actively seeks new profit growth point)In recent years, Zhejiang Wynca Chemical Industry Group Co., Ltd. (Zhejiang Wynca), a leading enterprise in China’s glyphosate industry, has also vigorously expanded its industrial chain and businesses in related industrial fields, such as conventional breeding, microcredit, mineral resources and operating lease. In H1 2015 alone, Zhejiang Wynca has taken three major measures in strengthening its businesses in the fields of agriaviation, internet financing and financial leasing. For example, Zhejiang Wynca invested in Anyang Quanfeng Aviation Crop Protection Technology Co., Ltd. and meanwhile jointly set up Nongfeike Agricultural Science and Technology Service Co., Ltd. Moreover, it invested and established Wynca Micro-credit Service Co., Ltd., an online financial service platform, and Shanghai Xinjiu Financial Lease Co., Ltd. to enhance the profits of leasing businesses (for more information, please refer to Glyphosate China Monthly Report 1506: Zhejiang Wynca actively seeks new profit growth point)

The zero growth in pesticide consumption requires measure supports, land transfer and the aging agricultural population call for large-scale operation and pest control and prevention are badly in need of efficient crop protection, insiders are optimistic about the field of agriaviation. Currently, domestic enterprises, such as Guangxi Tianyuan Biochemistry Co., Ltd. (Guangxi Tianyuan) and Jiangsu Kwin Group Co., Ltd. have successfully transformed themselves towards this field. Of this, Guangxi Tianyuan invested more in agriaviation. It has specially founded a department for agriaviation to march into the spraying service by unmanned aerial vehicle (UAV) to protect crops and established several special and professional pesticide-spraying teams to serve for growers. Meanwhile, Guangxi Tianyuan becomes more intensively in the agrochemical market segments. For instance, it enriches the product supply chain on the basis of traditional pesticide products and strives to develop pesticide-fertilizer products (mixtures of pesticides and fertilizers). Jiangsu Kwin also seeks for transformation in the field of agriaviation. Now it has made relatively great breakthroughs in the development and registration of pesticides specialized for agriaviation and made progress in the aspect of UAV spraying service for crop protection.

Along with the general tendency of “”internet+””, part of agrochemical enterprises also pay more efforts to construct agricultural e-commerce platforms and transform into agricultural service providers. For example, Shenzhen Noposion Agrochemicals Co., Ltd. (Shenzhen Noposion) kept high profile in setting up “”Tiantianquan””, an agricultural e-commerce platform to march into the agricultural internet field. Then, it set up industrial buyout fund, mainly aiming to invest in the internet, finance and logistics in rural areas and in the buyout projects related to agricultural industries to prop up its strategy in cross-industrial development. Jiangsu Huifeng Agrochemical Co., Ltd. (Jiangsu Huifeng) invested in Nongyi Net to expand the e-commerce of pesticides and in Shijiazhuang Kairui Chemical Co., Ltd. to enrich product variety and entered the promising glufosinate-ammonium market.

What’s more, to provide growers with entire solution to crop problems is also one of the major directions for domestic enterprises to make transformation. Qingdao Hailir Pesticides & Chemicals Co., Ltd. (Qingdao Hailir) put forward the developmental strategy of becoming a professional service provider with harvest solution for growers and serve for growers with its product advantages and entire solution to crop problems. At present, Qingdao Hailir has started to popularize the entire solution to general crop problems and plans to become an expert team in controlling plant diseases and pests for major growers, cooperatives and family farms and a whole-course technical adviser for farming giants in three to five years. Next, Qingdao Hailir is also projecting to provide service for the whole agricultural industrial chain and planning to step into the fields of seeds, fertilizers and agricultural machinery.

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