By Wang Can, Shao Shanshan, China Crop Protection Industry Association (CCPIA) 

Stable market and increasing benefits in 2019

1. Increased revenue and narrowed profit growth

   In 2019, there were 719 enterprises above designated size in China’s pesticides industry, whose total assets reached RMB266.052 billion, an increase of 5.6% year-on-year; main business income was RMB214.643 billion, an increase of 4.8% year-on-year; total profit reached RMB19.78 billion, a year-on-year decrease of 0.2%. Among them, the total profit of technical materials decreased by 4.2% year-on-year, and biochemical pesticides and microbial pesticides increased by 26.8% year-on-year. See Table 1 for details.

   Table 1  Economic indicators of pesticides enterprises above designated size in 2019

   The number of enterprises above the designated size in China's pesticides industry has gradually decreased, with 237 shutting down permanently in 2009. Enterprises’ profits are growing, but the growth rate is being narrowed. Under impacts like industrial policies, the production costs have increased, product price increase has been limited, and the growth rate of the total profits of enterprises above designated size has narrowed. Meanwhile, the average profit in 2019 decreased by 6.6% to RMB27.5104 million, a year-on-year decrease for two consecutive years.

   2. Pesticides output increased slightly, ending a two-year decline

   In 2019, the output of chemical materials (100%) of enterprises above designated size was 2.254 million tons, an increase of 1.4% year-on-year. Among them, the herbicide output was 935 kt, an increase of 0.4% year-on-year, accounting for 41.5% of the total pesticides output; the pesticide output was 389 kt, a decrease of 2.1% year-on-year, accounting for 17.3% of the total pesticides output; the fungicide output was 165 kt, an increase of 0.3% year-on-year, accounting for 7.3% of the total pesticides output. See Table 2 for the details of pesticides output of companies above designated size in 2019.

   Table 2  Pesticides output of companies above designated size in 2019

   As for output by provinces, the top three in 2019 were Jiangsu, Sichuan and Zhejiang, with pesticides output of 743 kt, 392 kt and 208 kt respectively, altogether accounting for 59.6% of the total, followed by Shandong Province, Hubei Province, Anhui Province and Henan Province, with output over 70 kt each.

   In 2019, the total pesticides output in Jiangsu decreased by 3.3% year-on-year. The figures also declined in Zhejiang, Hubei, Anhui, Henan, Jiangxi and Hunan, with a year-on-year decrease of 4.5%, 7.3%, 2.2%, 10.2%, 11.3% and 42.9% respectively. In addition, the relocation of some manufacturing enterprises from Jiangsu, Zhejiang and Shanghai has led to an increase in pesticides capacity and outputs in some other provinces and cities. In Sichuan, Hebei, Inner Mongolia, Guangxi and Jilin, the year-on-year increases were 24.8%, 31.7%, 29.8%, 35.9% and 33.5% respectively.

   3. Exports fell and trade surplus dropped for the first time

   In 2019, China's total import and export value of pesticides was US$5.62 billion, down 5.0% year-on-year, and the trade surplus was US$4.1 billion, down 9.8% year-on-year. The import and export values and trade surpluses of all types of pesticides all declined by different degrees. See Table 3 for details.

   Table 3  Import and export values and trade surpluses in 2019 

   In 2019, China's pesticides export volume was 1.468 million tons, down 1.5% year-on-year, and the export value was US$4.86 billion, down 7.1% year-on-year. The pesticides export situation in 2019 is shown in Table 4. By categories, the export volume of herbicides was 992 kt, down 2.2% year-on-year, and the export value was US$2.715 billion, down 11.4% year-on-year. The export volume of pesticide was 305 kt, down 1.4% year-on-year, and the export value was US$1.381 billion, down 0.7% year-on-year. The export amount of fungicide was 95 kt, up by 1.5%, but the export value fell by 3.1% year-on-year.

   Table 4   Pesticides export in 2019

   In 2019, China's import volume and import value of pesticides both increased. The import amount increased by 14.0% year-on-year, and the import value increased by 10.7% year-on-year. The growth in import amount was significantly higher than that of import value. See Table 5 for import details. By categories, the import amount of herbicides was 14 kt, down 0.4% year-on-year, and the import value was US$100 million, up 19.6% year-on-year. The import amount of pesticide was 11 kt, down 5.4% year-on-year, and the import value was US$167 million, down 3.6% year-on-year. The import volume of fungicide was 28 kt, up 8.4% year-on-year, and the import value was US$288 million, up 5.5% year-on-year.

  Table 5   Pesticides import in 2019

The industry develops steadily with outstanding results

   1. Supply-side structural reform promoting industry transformation and upgrading

   2019 was a critical year for the transformation of the pesticide industry from high-speed development to high-quality development. Driven by supply-side structural reforms, the industry shows a trend of accelerated integration, stricter environmental protection, and orderly production. As a pillar industry for agricultural development, the pesticides industry is constantly innovating and developing towards modernization, intensiveness, integration, and standardization, providing important support for agricultural production and food security.

   2. The merger and reorganization of the pesticide industry accelerates, and the industry concentration increases significantly

   In 2019, Limin acquired Weiyuan Biochemical, Dow and DuPont span off, Yangnong Chemical acquired Sinochem Zuowu, Nantong Jiangshan acquired Harbin Limin, and UPL acquired Yanhua Yongle. In addition, in late January 2020, Sinochem Group and ChemChina Group started a strategic reorganization of the entire industrial chain, indicating a substantial progress in the integration of these two groups.

   3. Global agrochemical industry pattern reshapes

   Large-scale mergers and acquisitions have accelerated the concentration of the industry. In 2019, Phillips McDougall announced the Top 20 agrochemical companies, including 10 Chinese companies.

   In 2019, Syngenta, a subsidiary of ChemChina, ranked No. 1 in the sales, with the value reaching US$9.909 billion, a year-on-year increase of 7.2%. ChemChina’s subsidiary ADAMA’s sales of pesticides increased by 11.0% year-on-year. The sales of Nanjing Red Sun and Yangnong Chemical both increased by more than 20.0% year-on-year, and that of Sichuan Fuhua sales increased by 12.8% year-on-year. Lier Chemical and Liben Crop Technology successfully entered the Top 20 for the first time, with sales of US$605 million and US$561 million respectively, of which Lier's chemical pesticides sales increased by more than 30% year-on-year.

   4. Product competitiveness continues to increase

   The proportion of technical materials export in the total exports keeps decreasing while that of prepared materials export keeps increasing in a fast pace. The proportion of technical materials export amount fell from 46.4% in 2011 to 33.6% in 2018, and the proportion of their export value decreased from 63.2% to 56.3%. At the meantime, the export volume and export value of prepared chemicals increased by 23.74% and 55.0% respectively compared with 2011. The prepared products have received international recognition and the product quality and brand competitiveness have been enhanced.