While entering the second year of the 12th Five-Year Plan, domestic pesticide industry has gradually shown a sign of slight recovery in 2012. Followed the direction of Pesticide Industrial Policy and 12th Five-Year Plan for Pesticide Industry, M&A and expansion cases among domestic pesticide enterprises have also witnessed growth, according to Crop Protection China News 1301 issued by CCM.
Except for the acquisition cases, the Ministry of Industry and Information Technology of China (MIIT) has approved 8 batches containing 13 merger cases in 2012, involving 26 domestic pesticide enterprises.
In this issue, CCM will list the main cases of M&A and some external expansion that took place in domestic pesticide industry in 2012.
1. Sinochem & Jiangsu Yangnong
Sinochem International Corporation (Sinochem), one of the largest state-owned chemical groups in China, announced on 21 Feb., 2012 that it intends to invest less than USD259.37 million in Jiangsu Yangnong Chemical Group Co., Ltd. (Yangnong Group), a large chemical group in Jiangsu Province, as a strategic investor. The transaction will make Sinochem the second largest share holder in the group which also means that Sinochem will benefit a lot by enhancing its R&D and industrial transforming capacity, enriching production lines and improving industrial chain from the group ascribed to its powerful industrial base and high-efficient synergy value with the fine chemical engineering and farm chemical businesses. On the other hand, Yangnong Group and Jiangsu Yangnong Chemical Co., Ltd., (Jiangsu Yangnong), a leading pyrethroid insecticide player in China and a listed pesticide subsidiary of Yangnong Group respectively, will get more financial support to expand business in both domestic market and oversea market.
On 9 Dec., 2012, Jiangsu Yangnong announced to set up a new pesticide production subsidiary in Rudong County, Jiangsu Province, with a total investment of USD28.52 million. The new subsidiary was planned to be mainly engaged in the production and sales of pesticides and pesticide intermediates, fine chemicals, etc.
2. Huapont
On 24 March, 2012, aiming to further expand its pesticide business, Chongqing Huapont Pharm Co., Ltd. (Huapont), a listed pharmaceutical company in China, planned to raise USD144.76 million through non-public offering of A shares for the construction of four new projects, namely a construction project of a new R&D base, construction project of 600t/a azoxystrobin, 900t/a sulcotrione/mesotrione and 3,500t/a pesticide formulations, a medicine formulation technical innovation project and a circulating fund supplementation project.
On 8 May, 2012, Huapont announced to conduct its first acquisition in 2012. It planned to purchase 49% equities of Hebei Wanquan Hongyu Chemical Co., Ltd. (Wanquan Hongyu), a large herbicide producer in Hebei Province with main products of 37% clethodim TK and metamitron TC.
Later on, Huapont continued to expand in domestic pesticide industry. It announced on 24 Aug., 2012 to acquire 58.26% equity of Hangzhou Qingfeng Agro-chemical Co., Ltd. (Hangzhou Qingfeng), a large pesticide enterprise in Zhejiang Province, with a total investment of USD9.16 million. Till then, Huapong started to set foot in agrochemical formulation industry.
3. Noposion
Shenzhen Noposion Agrochemical Co., Ltd. (Noposion), a leading pesticide formulation company in China, announced on 23 March, 2012 that it plans to increase the registered capital of Shandong Qutii Machine Co., Ltd. (Shandong Qutii), an agricultural machinery subsidiary of Noposion, by co-investing USD3.17 million with Maruyama Manufacturing Company Inc. (Maruyama), a large agricultural machinery corporation in Japan.
4. Nanjing Redsun
Nanjing Redsun Co., Ltd. (Nanjing Redsun), a leading pyridine pesticide producer in China, announced on 24 April, 2012 that it planned to set up a brand new pesticide subsidiary in Chongqing City, China, with a total investment of USD21.59 million.
The new subsidiary will be mainly engaged in the production and sales of pesticides, pesticide packages, and pesticide intermediates (such as pyridine, 2-methyl pyridine and 3-methyl pyridine). And the foundation of it was aiming at the expansion of current pesticide businesses and cultivation of new economic growth points for Nanjing Redsun.
5. Anhui Huilong
Aiming to expand its business in other provinces, Anhui Huilong Agricultural Means of Production Group Co., Ltd. (Anhui Huilong), a listed agricultural chain management enterprise in Anhui Province, announced on 23 May, 2012 that it will invest USD5.65 million (RMB35.76 million) to establish two new companies, namely Anhui Huilong Agricultural Means of Production Group Agricultural Science and Technology Co., Ltd. (AHAMPGAST) and Guangdong Huilong Agricultural Means of Production Co., Ltd. (Guangdong Huilong).
Right after releasing its expansion strategy in Guangdong Province, Anhui Huilong planned to kick off its further expansion in South China. On 13 June, 2012, Anhui Huilong announced to acquire 60% equities of Hainan Agricultural Means of Production Co., Ltd. (HAMP), one of the largest agricultural means of production companies in Hainan Province, with USD12.37 million.
6. ABA Chemicals
On 2 June, 2012, ABA Chemicals Corporation (ABA Chemicals), a listed pesticide intermediate and pharmaceutical intermediate producer in China, announced to co-found a pesticide subsidiary with Jiangsu Jiannong Agrochemical Co., Ltd. (Jiangsu Jiannong), a private pesticide producer in Jiangsu Province, with a total investment of USD15.8 million. After the foundation of the new company, ABA Chemicals will be formally involved in domestic pesticide industry.
7. Zhejiang Wynca
Zhejiang Wynca Chemical Inudustry Group Co., Ltd. (Zhejiang Wynca), one of the largest glyphosate producers in China, announced to set foot in seed industry on 5 May, 2012 by acquiring 51% equities of Shandong Xinfeng Seed Co., Ltd. (Shandong Xinfeng), a large seed enterprise in Shandong Province, with a total investment of about USD10.74 million.
8. Shandong Lubei
In order to exploit the Association of Southeast Asian Nations (ASEAN) market, Shandong Lubei Enterprise Group General Company (Shandong Lubei), a big corporation which produces aluminum oxide, titanium dioxide, chemical fertilizer and so on, planned to construct a pesticide formulation factory in Myanmar.
On June 21, 2012, a delegation from Shandong Lubei went to Myanmar for inspection and visit. Shandong Lubei was invited by the Myanmar Ministry of Agriculture to construct a pesticide factory for herbicide, insecticide and plant growth regulator production in Myanmar.
9. Nantong Jiangshan
Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. (Nantong Jiangshan), a listed pesticide manufacturer in China, announced on 20 Nov., 2012 that it plans to acquire 90% equities of Ladda Group Holdings Co., Ltd. (Ladda Group), a large agrochemical enterprise in Thailand, at a cost of less than USD33.39 million. And after completing the transaction, Nantong Jiangshan will further invest USD3.9 million in Ladda Group as an operation fund, then its controlling equity percentage of Ladda Group will reach 91%.
In addition to all the acquisition cases, some pesticide enterprises sold their subsidiaries aiming to be in accordance with their overall strategies.
Hailir Group & Nantong Jiangshan
Aiming to pull up the profit margin of net assets in a short time for its IPO, Hailir Pesticides and Chemicals Group (Hailir Group), a state-appointed pesticide formulation manufacturer in China, planned to peel off some relatively inferior assets. It announced on 6 March, 2012 to sell out all equities of its pesticide technical subsidiary, namely Qingdao KYX Chemical Co., Ltd. (Qingdao KYX).
Owing to the high relocation fees, Nantong Jiangshan announced on 1 June, 2012 that it planned to launch an equity transfer of all the shares of Nantong Dongchang Chemical Industrial Co., Ltd. (Nantong Dongchang), a large chemical producer, that it holds, about 28.05 million shares accounting for 67.79% of the total equity of Nantong Dongchang. Nantong Dongchang was forced to relocate within 2012 according to the relocation policy of local government and the relocation fees reached to USD2.59 million which would be self-financed.
Contents of Crop Protection China News 1301:
Main expansion cases of domestic pesticide enterprieses in 2012
First standard for commodity supervision and sampling inspection released
China brews soybean industrial policy adjustment
China needs to attach importance to regulate on pesticide adjuvants in extra small package
Pyridine price rises, paraquat follows
Nutrichem gains GLP certification from OECD
Performance prediction of main domestic pesticide companies in 2012
Jiangsu Huifeng to set foot in seed industry
Crop Protection China News, a monthly publication issued by CCM on 31st, offers timely update and close follow-up of China’s crop protection industry dynamics. It also provides you with professional features articles, keeping you aware of the latest industrial development, import and export analysis, and market data.
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