CCM: CEFC International to divest from agrochemical business since 2016 05-06-2016

On 15 Jan., 2016, CEFC Anhui International Holding Co., Ltd. (CEFC International) announced that CEFC Shanghai International Group Limited (CEFC Shanghai), its controlling shareholder, was preparing for a capital injection. This means that CEFC Shanghai will get listed after injecting capital into CEFC International, which is currently listed. CEFC Shanghai already owns CEFC International and the capital injection will help CEFC Shanghai and CEFC International to meet the standards to complete a back-door listing.


Also CEFC International, which has been dominant in China's agrochemical stock market, will restructure and will exit the agrochemical business in 2016.


As of 2015, CEFC International’s income mainly came from chemical raw materials and chemical manufacturing, and trading agricultural materials. However, in Oct. 2015, CEFC International disclosed that its agrochemical business and agricultural materials trade will be sold. Related assets and liabilities will be transferred to CEFC Anhui International Holding Co., Ltd. (Huaxing Chemical), CEFC International’s wholly-owned company.


Also, CEFC International plans to settle and sell the claims and debts of Huaxing Chemical. After integrating the above assets, CEFC International will sell its agrochemical subsidiaries to CEFC Petroleum (Guangdong) Co., Ltd. (CEFC Guangdong).


Huaxing Chemical, which will take over CEFC International's agrochemicals business, cannot access capital from the financial markets. Will it embrace better development in the future with CEFC Guangdong as its planner? In particular, with the stagnant current pesticide market, what kind of future role will the agrochemical business of Huaxing Chemical play in the agrochemical industry?


CEFC Shanghai, a controlling shareholder of CEFC International, is planning to transfer its main energy and financial businesses assets to CEFC International. This is essential for CEFC International to realize its development strategy of combining energy with finance.


CEFC International will issue stocks to raise USD2.31 billion-USD3.08 billion (RMB15 billion-RMB20 billion) and to purchase assets. The annual profit of the assets is USD231 million-USD308 million (RMB1.5 billion-RMB2 billion) and due to their promising growth, the assets are worth about USD3.54 billion-USD4.61 billion (RMB23 billion-RMB30 billion) in a preliminary estimate. The supporting finance will be used for trading energy and for constructing bases to reserve oil.


CEFC International has been suspended since the market opened on 15 Jan., 2016 because of uncertainties over issues related to its development strategy and plans. The company has promised that it will resume trading within three months and will strive to release its plan regarding its major asset reorganization by 15 April, 2016.


In May 2013, CEFC Shanghai officially became the shareholder of CEFC International. In Dec. 2014, Anhui Huaxing Chemical Industry Co., Ltd. was renamed as CEFC Anhui International Holding Co., Ltd.


With the entry of CEFC Shanghai, CEFC International changed its future development strategy. CEFC International is focusing on energy and is striving to become a major global player. CEFC International will increase its investments in oil and gas from Central and Western Asia, Central and Western Europe and Africa, aiming to directly control the upstream resource of oil and gas.


CEFC International will also establish a huge downstream network for energy consumption in Asia and Europe, attempting to control the demand for energy consumption and to enhance its bargaining ability. CEFC International will still offer different financial services and to shape itself as a multinational in the energy and finance industries with control over oil fields, oil refineries, gas stations, strategic reserve pools, trades, transportation, securities, bank, futures, factoring, lease and trading centers.

This article comes from Herbicides China News 1601, CCM

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.


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Tag: agrochemical  pesticide  herbicide

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