CCM: Sichuan Hebang: over 7.29 percentage points YoY in gross profit margin of PMIDA in H1 2016 09-29-2016

In H1 2016, Sichuan Hebang Biotechnology Co., Ltd. (Sichuan Hebang)'s gross profit margin of PMIDA increased despite the depressed pesticide market, mainly thanks to its self-sufficient raw materials and well-controlled production costs. According to the company's financial report of H1 2016 (Jan.-June), the revenue from PMIDA amounted to USD58.12 million (RMB388.14 million), down 34.44% YoY. Cost of sales of PMIDA decreased by 40.94% YoY, which boosted the gross profit margin by 7.29 percentage points YoY.

 


Source: Baidu


It is known that Sichuan Hebang's PMIDA was developed through enriching its product line of sodium carbonate and ammonia chloride. Up to now, Sichuan Hebang is one of the major PMIDA suppliers (135,000 t/a) in China.

 

At present, Sichuan Hebang's pesticide products mainly include chemical pesticides and intermediates, biological pesticides, as well as other biological products. In terms of chemical pesticides, the main products are glyphosate and its intermediate, PMIDA.

 

Notably, Sichuan Hebang's H1 2016 financial figures also included the financial statement of S.T.K.Stockton Group Ltd. (S.T.K.), which was acquired by Sichuan Hebang in H2 2015. During the report period, S.T.K. achieved a revenue of USD22.81 million (RMB152.34 million) and a gross profit margin of 30.83%. This, to some degree, has promoted the growth of Sichuan Hebang's total revenue. Sichuan Hebang's 50,000 t/a glyphosate project was put into trial production at the end of June 2016, but has not yet begun to contribute to the company's financial performance. Therefore, Sichuan Hebang's pesticide revenue mainly came from S.T.K.

 



"In regard to our pesticide business, we kept expanding PMIDA markets in H1 2016. We confirmed major supplying regions of global downstream manufacturers and realized expected earnings. Besides, S.T.K helped us open the international pesticide market by actively promoting biological pesticides," said Sichuan Hebang.

 

Regarding the development plan of the H2 2016, Sichuan Hebang claimed that it will continue to:

 

  • Expand S.T.K's biological pesticide business
  • Keep a balance in the production and sale of PMIDA
  • Improve production techniques, reduce consumption cost, and increase profitability
  • Ensure that its 50,000 t/a glyphosate project will run at full capacity
  • Seek new collaborating partners, expand sales channels, and improve business layout
  • Stick to professional segmentation management, further control production cost, and maintain competitiveness of its products concerning cost and quality


Sichuan Hebang's financial figurers of agrochemical business, H1 2016, million USD

Product

Revenue

YoY change

Cost of sales

YoY change

Gross profit margin

YoY change

PMIDA

58.12

-34.44%

38.55

-40.94%

33.68%

+7.29 percentage points

Pesticide

22.81

/

15.78

/

30.83%

/

Source: Sichuan Hebang Biotechnology Co., Ltd.

  

This article comes from Glyphosate China Monthly Report 1609, 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.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.

 

Tag: pesticide  glyphosate

 

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