In 2015, the overall pesticide industry was in a downturn, mainly affected by the depressed economy,
dropping grain price, weak demand, and stricter environmental requirement. This
increased the number of enterprises at loss. Shandong Luba Chemical Co., Ltd. (Shandong
Luba, stock code: 834117), a Chinese pesticide enterprise, inevitably suffered
from loss this year.
Source: Bing
Financial figures of
Shandong Luba in 2015
-
Total
revenue: USD199.63 million (RMB1.29 billion), down by 14.75% YoY
-
Net
profit: USD31.10 million (RMB200.79 million), down by 43.40% YoY
That the sales prices of paraquat and pyridine hit record lows is the major reason dragging down the
performance of Shandong Luba. The company disclosed that the average sales
price of its products in 2015 was 27% lower than that in 2014, reducing its
total revenue sharply.
However, Shandong Luba's
costs in production and management did not fall accordingly, pulling down the
gross profit margin (27.34%, 11.01 percentage points lower than that in 2014).
The falls in total revenue and gross profit margin directly led to a YoY soar
in the company's net profit.
Shandong
Luba's major financial figures, 2015, million USD
|
Item
|
2015
|
YoY change (%)
|
2014
|
|
Total revenue
|
199.63
|
-14.75
|
234.16
|
|
Gross profit margin
|
27.34%
|
-
|
38.35%
|
|
Net profit
|
31.10
|
-43.4
|
54.95
|
|
Item
|
The end of 2015
|
YoY change (%)
|
The end of 2014
|
|
Total assets
|
233.09
|
12.41
|
207.36
|
|
Net assets
|
189.18
|
18.83
|
159.20
|
Source: Shandong Luba Chemical
Co., Ltd.
YoY
changes in total assets, total revenue and net profit of Shandong Luba, 2014
& 2015
|
Item
|
2015
(%)
|
2014
(%)
|
|
Total assets
|
12.41
|
24.6
|
|
Total revenue
|
-14.75
|
24.77
|
|
Net profit
|
-43.4
|
67.48
|
Source: Shandong Luba Chemical
Co., Ltd.
Herbicide business is
still the major segment of Shandong Luba. As one of the pesticide enterprises
enjoying a complete industrial chain for pyridine pesticides in China, Shandong
Luba's products cover paraquat, pyridine, diquat, fluroxypyr and intermediates.
In 2015, its sales from herbicides amounted to USD134.35 million (RMB867.42
million), 67.30% of the total revenue and down by 24.12% YoY, which was mainly
due to the falling sales price of paraquat. It is revealed that about 10% of
Shandong Luba's total revenue came from the sales of paraquat AS in 2015. As
China has issued the policy to ban paraquat AS, the sales proportion of
paraquat keeps declining.
In response to the falling
prices of paraquat and pyridine, Shandong Luba strengthened the market promotion
of pyridine and 3-methylpyridin in 2015, increasing the sales of pyridine
series products by 20.14% YoY to USD41.19 million (RMB265.97 million).
At the same time, the
company's domestic salesdropped by 21.40% YoY, affected by the sliding paraquat
price. However, since it improved the exports, the overseas sales had no dramatic
fall.
Shandong
Luba's revenue by product, 2015
|
Item
|
Revenue
(million USD)
|
Proportion
in total revenue
|
YoY
change
|
|
Herbicides
|
134.35
|
67.30%
|
-24.12%
|
|
Insecticides
|
23.28
|
11.66%
|
4.52%
|
|
Pyridines
|
41.19
|
20.64%
|
20.14%
|
|
Materials
|
0.81
|
0.40%
|
48.55%
|
|
Total
|
199.63
|
100%
|
-14.75%
|
Source: Shandong Luba Chemical
Co., Ltd.
Shandong
Luba's revenue by region, 2015
|
Item
|
Revenue
(million USD)
|
Proportion
in total revenue
|
YoY
change
|
|
Domestic
|
126.23
|
63.23%
|
-21.40%
|
|
Overseas
|
73.40
|
36.77%
|
-0.21%
|
|
Total
|
199.63
|
100%
|
-14.75%
|
Source: Shandong Luba Chemical
Co., Ltd.
Shandong Luba's
subsidiaries also failed to perform well in 2015 because of the depressed
market. As of the end of 2015, their financial figures were:
- Shandong WeifangLuba
Chemical Co., Ltd. (main business: production and sales of pesticides and
intermediates)
-
Total
revenue: USD89.66 million (RMB578.89 million), down by 23.79 YoY
-
Net
profit: USD13.79 million (RMB89.02 million), down by 56.47% YoY
- Shandong WeifangXinlv
Chemical Co., Ltd. (main business: sales of chemicals)
-
Total
revenue: 0 (all projects are under construction)
-
Net
profit: -USD152,316.60 (-RMB983,432.12)
- DezhouLuba Fine Chemical
Co., Ltd. (main business: production and sales of pesticides and intermediates)
-
Total
revenue: USD27.21 million (RMB175.68 million), down by 9.92% YoY
-
Net
profit: USD2.58 million (RMB16.67 million), down by 15% YoY
- Jinan Luba Pesticide
Co., Ltd. (main business: production and sales of pesticides)
-
Total
revenue: USD21.59 million (RMB139.38 million), up by 1.55% YoY
-
Net
profit: USD980,000 (RMB6.31 million), up by 33.47% YoY
To cope with the trouble
brought about by the stagnant paraquat market, Shandong Luba will keep adjusting
the product structure to reduce the impact from the negative policy on
paraquat. It plans to use the chloride pyridine project as a springboard for
the transformation and upgrading.
In 2016, Shandong Luba will invest USD46.46
million (RMB300 million) in constructing and perfecting this chloride pyridine
project; and it will perfect the industrial chain of pyridine pesticides, build
complete industrial chain for pyridine and chloride pyridine in two years as
well as strengthen the development of downstream low toxic pesticides of
chloride pyridine. Meantime, it will also vigorously develop the substitutes
for paraquat AS.
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Tag: pesticide paraquat herbicides