Analysis of Current Status of Pesticide Industry in China and Analysis of Enterprise Development

“Overproduction, homogenization of competition, dependence on foreign trade exceeds 50%... In the absence of a fundamental improvement in the external environment, more and more pesticide companies are facing a crisis of survival, leading innovation through innovation and taking the lead in branding. Roads will be the 'good recipe' for pesticide companies to crack down on development difficulties."

Recently, at the “Analysis and Forecast of China's Pesticide Situation in 2012 and the First China Pesticide Brand Annual Meeting” sponsored by the Farmer’s Daily, many pesticide companies expressed their current confusion. On the one hand, industry competition has intensified, and corporate profitability has been declining; On the other hand, the outlook for the world economy is sluggish, and the domestic economy has slowed down. This has led to many uncertainties.

The data show that in 2011 China's pesticide market still exceeds supply, pesticide production is about 2.5 million tons, while domestic total demand is only 308,000 tons, and exports exceed 1.25 million tons. Under a severe foreign trade situation, overcapacity The negative effects caused by "illness" will become more apparent.

“The rapid development of blindly expanding products has become a common problem among pesticide companies.” The marketing manager of a listed pesticide company in Jiangsu gave an example to reporters: The annual demand for glyphosate in China is about 50,000. Tons, actual production is about 300,000 to 350,000 tons, while domestic production capacity of the product has reached 1.166 million tons.

This situation has also occurred in some products, not only causing serious waste of resources, but also constraining the sustainable development of the company. It is learnt that the performance of listed pesticide companies such as Xinan, Jiangshan, and Sanonda in the first half of 2011 all experienced losses or declines in varying degrees.

From the perspective of the national pesticide industry as a whole, in the first half of 2011, the total profit of 773 large-scale pesticide companies was only 5.37 billion yuan, and the industry’s average profit margin was less than 6%, still at a relatively low level; the industry’s loss reached 10.7%. The loss of loss-making enterprises reached 370 million yuan, an increase of 105.9% year-on-year.

However, from the general trend of industry development, the current downturn in the pesticide market is also not a bad thing. As Chen Shengdou, director of the National Agricultural Technology Extension Service Center, attended the annual meeting, cruel competition forced companies to upgrade their existing pesticide products, upgrade their products, optimize product structure, and vigorously develop efficient, safe and environmentally friendly green pesticides. The focus shifts to improving efficiency and quality.

There are more than 2,000 pesticide companies in China. Most of them are small-scale and single-product, lacking real leading enterprises. At the same time, the world’s top eight Agrochemical Group sales have accounted for more than 80% of the global pesticide market, while China’s entire pesticide industry’s international market share is only 5%, the establishment of large-scale pesticide enterprise groups, increase industrial concentration, It will be an important way to increase the competitiveness of the entire industry. It is worth noting that with the implementation of the two major policies of China's "Pesticide Industry Policy" and "Twelfth Five-Year Plan for the Development of Pesticide Industry", a new round of "reshuffling" of China's pesticide industry may start.