Economic Evaluation of the Pesticides Manufacturing Sector in 2006   

By CPCIA  

The chemical pesticides manufacturing sector achieved rapid development in 2006. According to data provided by the National Bureau of Statistics, China had 723 chemical pesticide enterprises of considerable scale (all state-owned enterprises, and non state-owned enterprises with sales over RMB5.0 million in 2005). The industrial total production value was RMB75.284 billion, an increase of 17.23% over the previous year. The total asset value was RMB69.311 billion, an increase of 10.80%. The sales revenue was RMB72.949 billion, an increase of 16.81%. The total profit was RMB4.158 billion, an increase of 25.08%. The total employment was 154 800, down 0.05%.

1  Evaluation of the top
100 enterprises

In the chemical pesticide sector the sales revenue of the top 100 enterprises was a major portion of the sector total in 2006. According to data provided by the National Bureau of Statistics, the sales revenue of the top 100 enterprises was RMB44.879 billion, accounting for 61.52% of the total in the sector and being 16.81% higher than that of the top 100 in 2005. The sales revenue of the top ten accumulated to enterprises was RMB16.795 billion, accounting for 23.02% of the total sales revenue in the sector. The company that topped the list was Nanjing Redsun Group Co., Ltd. Its sales revenue was RMB4.013 billion, accounting for 5.50% of the total. In second place was Zhejiang Xinan Chemical Industrial Group Co., Ltd. Its sales revenue was RMB2.765 billion. Third was Nantong Jiangshan Agrochemical & Chemical Co., Ltd. Its sales revenue was RMB1.901 billion. The production of the chemical pesticide manufacturing sector was developing toward the mode of large enterprises and enterprise groups.
   In the chemical pesticides manufacturing sector the top 100 enterprises were still concentrated in eastern coastal areas. Jiangsu province hosts the most enterprises that were included in the top 100 - 39. The sales revenue of these 39 companies was RMB16.964 billion, accounting for 37.8% of the top 100. Zhejiang province hosts 16 enterprises of the top 100 enterprises. Their sales revenue was accumulated to RMB4.635 billion, accounting for 10.3%. Shandong province held the third place, with 11 enterprises. Their sales revenue was RMB3.615 billion, accounting for 8.1%.
   Regarding ownership, among the top 100 enterprises there were 83 non-state-owned (controlled) enterprises. Their sales revenue was RMB31.490 billion, accounting for 70.17% of the total sales revenue in the top 100 enterprises. With the deep-going reform in economy, the non-state-owned economy is increasingly becoming an important component in the market. It displayed unprecedented vitality and added new power to the chemical pesticides manufacturing sector.
   Regarding operating performance, the profit/sales ratio, the profit/assets ratio and the per-capita profit in the top 100 enterprises were 6.33%, 6.36% and RMB36 800 respectively, being 0.63 percentage points, 0.36 percentage points and 37% higher than the overall level in the sector. They displayed a remarkable advantage - both their asset utilization rates and their productivity remarked the best level in the sector.

2  Comprehensive evaluation

The year 2006 was the best of the past five years for the development of the chemical pesticide manufacturing sector in China. Compared with 2005, both the sales revenue and the total profit grew considerably. The chemical pesticide manufacturing sector had a strong scale effect and the development of leading enterprises made quite a big contribution. The nationwide distribution was rather concentrated and the initial effect of clustered economy was displayed. In terms of external environment, the main reason for the improvement of the operating performance in the chemical pesticide manufacturing sector was that the Central Government laid emphasis on agriculture, adopted a series of supportive policies to agriculture and therefore created a sound external environment to the pesticide sector. Owing to the increase of the grain planting area and the enhancement of farmers' enthusiasm for grain planting, the input in agricultural production increased considerably. The driving force from the demand provided a sound macro environment for the development of the chemical pesticide manufacturing sector.
   Looking deeply, however, there are still many difficulties and problems in the chemical pesticide manufacturing sector. In the external environment, factors such as rising raw material prices and the short supply of resources like power and coal have considerable cost pressures on the pesticide sector. In view of supply and demand, the chemical pesticide market in China showed an overall oversupply and it is therefore necessary to strengthen control of the expansion and conduct active readjustment to the product portfolio. In enterprises themselves, the technical level and R&D capabilities in the chemical pesticide manufacturing sector need further upgrading and it is therefore imperative to make more efforts in R&D and actively develop new chemical pesticides with intellectual property rights.