Domestic Pesticide Firms Experienced Unfavorable Results in H1    

By Lily Wang   
With the awful whether like drought, extremely low temperature and flood in China, the domestic demand for pesticides fell in the first half of 2010. Furthermore, the global pesticide market was still sluggish due to the economic turmoil. As a result, almost all of China's pesticide firms experienced a bothersome period in the first half of 2010 for their unsatisfactory performances.

Zhejiang Wynca Chemical Industrial Group Co., Ltd. (Wynca Chemical, SH: 600596) reported its net profit dropped 36.39% year-on-year to RMB104 million for H1 2010 from RMB163 million in H1 2008 due to the sluggish glyphosate market in the world. The sales rose 10.95% from a year earlier to RMB2.2 billion. The pesticide business contributed RMB1.03 billion to its total revenue, showing a year-on-year decrease of 12.8%. The gross profit rate for its pesticides business was 7.14% in H1 2010 compared with 19.25% for H1 2009 and 46.04% for H1 2008. For its extra main business, silicone business recorded revenue of RMB714 million, up 26.7% from RMB563 million in H1 2009, with a gross margin of 30.64%. The company is building three new projects - 14 000 t/a room temperature vulcanizing silicone sealants project, 30 000 t/a methyl chlorosilane byproducts utility project phase II and green pesticide project.

Hubei Sanonda Co., Ltd. (SZ: 000553, 200553), the world's leading methamidophos maker, posted RMB796 million in sales in H1 2010, a year-on-year decrease of 19.18% from H1 2009's RMB985 million. The company reported RMB12.41 million in net profit, down 71.88% from RMB44 million in H1 2009. The decreases were due to unsalable pesticides market and lowering prices. Its agrochemicals business involving pesticides and fertilizers saw a 25.73% decrease in sales, and reported gross profit margin for H1, compared with 17.29% in H1 2009 and 22.73% in H1 2008.

Jiangsu Yangnong Chemical Co., Ltd. (SH: 600486), China's main pyrethroids producer, released sales of RMB988 million for H1 2010, down 15.36% from RMB1.16 billion in H1 2009. The net profit was RMB113 million for H1 2010, down 5.78% year-on-year.
    The thin performance was due to lessened insect pest, reduction of plant production and decreased demand for pesticides.
    The herbicide business contributed RMB335 million in sales, down 12.96% from RMB384 million in H1 2009. The herbicide business indicated a gross profit margin of 20.57%.
    The insecticide business recorded RMB625 million in sales for H1, down 12.32% from 2009 H1's RMB713 million, of which pyrethroids for applications in sanitation and agriculture indicating a drop of 27.85% and a rise of 9.77% respectively. The insecticide business has a gross profit margin of 25.9%.
   Jiangsu Yangnong said the diminishing pesticide demand, appreciation of RMB and cancelled export rebates caused increase of glyphosate production cost. The company will further underline innovations of technology and new products.

Nantong Jiangshan Agrochemical & Chemical Co., Ltd. (SH: 600389) posted sales of RMB1.1 billion in H1 2010, down 9.8% from RMB1.22 billion in H1 2009. The loss was RMB548 million compared with net profit of RMB1.4 million in H1 2009. The dual decreases for sales and profit were due to abominable weather, oversupply of glyphosate in Chinese market and the world's sluggish pesticide market.  
    Sales for its pesticide business fell 19.84% to RMB618 million. Of which, sales for glyphosate shrank 16.57% to RMB537 million. The gross profit margin was 3.43% for pesticide business and 1.91% for glyphosate.
    Nantong Jiangshan has moved its site into Nantong Economic Technology Development Zone and it is advancing the construction of new site.

Zhejiang Shenghua Biok Biology Co., Ltd. (Shenghua Biok, SH: 600226) saw an annual decrease of 21.17% and 4.18% in sales and net profit respectively for H1. Its pesticide business' sales fell 1.1% year-on-year. The gross profit rate was 12.38% for pesticide business in H1 2010. Exportation contributed to RMB534 million in total sales of RMB892 million.

Anhui Huaxing Chemical Industry Co., Ltd. (Huaxing, SZ: 002018) posted sales of RMB486 million for H1, a year-on-year increase of 12.31%. The net profit plummeted 94.69% from a year earlier to RMB2.1 million, which was driven by unsalable glyphosate and insecticide markets.
    Its pesticide business achieved sales of RMB481 million in H1, up 11.75% year-on-year, with a gross profit rate of 5.03%. Breakdown by product, the company's insecticides contributed sales of RMB183 million, up 37.58%, with a gross profit margin of 11.34%; herbicides contribute sales of RMB290 million, down 0.66%, with a gross profit margin of 9.61%; bactericides sales of RMB8.45 million, up 42%, with a gross margin of 24%.
   The globally decreasing demand for pesticides has caused Huaxing's exports to sharply reduce since 2009. The company changed marketing strategy from exportation as a key to expansion of domestic market shares.

Shenzhen NOPOSION Agrochemicals Co., Ltd. (SZ: 002215), China's leading pesticide formulation maker based in Shenzhen of Guangdong province, gained a 12% growth in sales for H1. The net profit was RMB85 million, down 11.9% year-on-year.
   The gross profit margin was 40.53% for pesticide formulations, of which 40.65% for insecticide formulations; 49.48% for bactericide formulations and 33.35% for herbicide formulations.
   The company is building an environmentally friendly pesticide formulation plant in southwestern China, a 10 000 t/a herbicide project in Shandong province, and a soluble fertilizer production line in Dongguan of Guangdong province.

Nanjing Redsun Co., Ltd. (Nanjing Redsun, SZ: 000525) recorded sales of RMB1 597 million for H1, up 2.26% year-on-year. The net profit was RMB2.9 million, sharply down 80.59%. Its pesticide business saw a 17.85% growth in sales, with a gross profit margin of 11.41%. Its fertilizer trading business fell 2.95% year-on-year in sales, with a thin profit margin of 3.1%.
   Nanjing Redsun said the idle fertilizer market worldwide and lower insecticide price as well as price rise of raw material made its cost increase and profit-making ability decrease.
   The company is progressing in construction of a new 6 000 t/a chlorfluazuron and pymetrozine project.

Fujian Sannong Group Co., Ltd. (Fujian Sannong, SZ: 000732) reported that sales rose 74.74% year-on-year to RMB596 million in H1. The net profit increased 48.31% from a year ago to RMB114 million. The significant growth was driven by its housing construction business. The company's former core business - pesticide saw a 56% decrease in sales, being RMB52.77 million, due to vertical fall of glyphosate sales. The pesticide business has a thin profit rate of 1.16%.

Hebei Veyong Bio-Chemical Co., Ltd. (SH: 600803) released sales for domestic market fell 22.34% year-on-year to RMB243 million for H1, while for abroad markets, sales was up 16.22% to RMB131 million. Its core pesticide business saw a 14.91% decrease in sales, at RMB311 million, with a profit margin of 15.36%. The unsatisfactory performance was contributed to sluggish pesticide market worldwide and falling price of its key products.

Lianhe Chemical Technology Co., Ltd. (Lianhe Technology, SZ: 002250), the producer of intermediates for pesticide and medicine, boosted 66.1% year-on-year in sales to RMB930 million for H1. The net profit added 77.82% from a year earlier to RMB86 million. The good record was buoyed by its completed market sales network, the company said. The