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Chinese Pesticide Producers Eye US Competition

16 August 2013

CHINA - Chinese pesticide producers are looking to compete with the "Big Six" agriculture chemical (ag-chem) companies.

These days, the Dow Chemical Company, Syngenta AG, Monsanto Company, Bayer AG, BASF SE and E.I. Du Pont De Nemours and Company are producing the majority of their ag-chem products in China, according to Telisport Putsavage, a pesticide industry expert and environmental counsel at Sullivan & Worcester law firm in Washington, DC, reports China Daily.

On the other hand, the Chinese government expects to see an increased effort by domestic ag-chem companies to sell their own brands of products in the US to increase China's market share of the industry.

"One of the difficulties for any company, particularly offshore companies looking to enter into the US, is figuring out a way to break into distribution," Putsavage said.

"These products do not go to the farmers and they don't even go directly into farm retail stores. They all go through distributors."

In 2011, China's largest generic ag-chem company, ChemChina, with nearly $32 billion in annual sales, put up $2.4 billion to acquire the world's largest generic ag-chem producer, Israel-based Makhteshin Agan Industries.

Pesticide companies have played a key role in driving the growth of China's chemical production output, which surpassed that of the US for the first time in 2010.

In 2012, chemical pesticide output from China increased by 34 per cent year-on-year to 3.6 million tons, according to the China Pesticide Industry Report, 2012-2015. In 2012, the operating revenue of Chinese pesticide manufacturing increased by 21 per cent year-on-year to $38.5 billion, while total profit reached about $2.9 billion.

Noting recent success in the industry, the Chinese government has launched a five-year plan to reduce the number of pesticide plants - there are more than 2,000 pesticide makers in China - to create a field of about 20 Chinese ag-chem firms with strong international presence.

"The big companies in the US aren't encouraging the Chinese to come in," Putsavage said. "But we believe it's inevitable. The Chinese produce the largest part of the product."

The increased presence of Chinese ag-chem in the US market would help lower prices for farmers as a result of greater competition.

TheCropSite News Desk



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