Friday, June 28, 2013

Background Information Introduction of Pesticide Industrial Parks in China

As one of the largest pesticide production and export countries in the world, China has witnessed continuous growth in its pesticide output and export in recent years. Its pesticide TC output in 2012 reached 3,549,090 tonnes, exceeding 3 million tonnes for the first time, according to China Crop Protection Monthly Report issued by CCM in May.
 
Although China’s pesticide industry has experienced fast development in recent years, some negative problems have been generated at the same time, such as the recurrence of "three wastes" (waste gas, waste water and industrial residue), the plight of overcapacity, irrational competition, lack of world-famous brands and low added value.
 
 
During the planning stage, the establishment of pesticide industrial parks is believed to be helpful to coordinate pesticide industrial integration. What's more, with reasonable resource allocation and effective environmental protection, it is a good way to optimize industrial structure and achieve greater economic benefits. As the majority of Chinese pesticide companies are not armed with the equipment, technology and other conditions to deal with industrial waste, the facilities of pesticide industrial parks help to tackle it. In recent years, most pesticide companies have moved their production sites into industrial parks so that they can cope with waste gas, waste water and industrial residue. The relocation to industrial parks is also beneficial because it helps integrate various resources, and better supports companies in R&D and QC. Therefore, the Chinese Central Government encourages pesticide manufacturers to relocate to industrial parks.
 
China began the planning of industrial parks for pesticide companies in 2004. At the end of 2005, the first was set up in Yangkou Chemical Industrial Park in Rudong County, Jiangsu Province by the joint efforts of the China Crop Protection Industry Association (CCPIA) and Rudong County Government. At present, with the encouragement and support from both central and local governments, Rudong County Yangkou Chemical Industrial Park in Jiangsu Province is a leading industrial park in China. Aiming to create an environmentally-friendly industrial park, Yangkou Chemical Industrial Park has made great achievements in environmental protection and safety maintenance, together with capacity for chemical products. At the beginning of 2006, the CCPIA signed an agreement with Weifang Binhai Economic Development Zone in Shandong Province to co-establish another industrial park for pesticide companies in northern China, namely Northern China Pesticide Industry Park. After that, pesticide industrial parks were founded step by step in Nanjing, Changzhou, Taizhou, Taixing, Rugao, etc.
 
So far, there are more than 390 pesticide industrial parks in China and more parks are under construction. The strategic adjustment of the pesticide industry in China is being realized through pesticide manufacturers' relocation into pesticide industrial parks. Relocation to pesticide industrial parks was one of the key aims for China's pesticide industry in 2010 and 2011.

Factors Accelerate Pesticide Players' Move into Pesticide Industrial Parks
Related Policies Concerning Pesticide Industrial Parks in Recent Years
Top 10 Pesticide Industrial Parks in China
Rudong County Yangkou Chemical Industrial Park
Weifang Binhai Economic Development Area Lin'gang Chemical Industrial Park
Lianyungang Chemical Industrial Park
Yancheng Yanhai Chemical Industrial Park
China Fine Chemicals (Taixing) Development Park
Nanjing Chemical Industry Park
Dongzhi County Xiangyu Chemical Industrial Park
Dafeng Port Economic Zone
Linxiang Industrial Park Ruxi Industrial Zone
Changde Deshan Economic Development Zone
Conclusions and New Pesticide Production Lines Investment Suggestions

China Crop Protection Monthly Report, a monthly publication issued by CCM, will keep an eye on the most important or the latest occurrences or the hottest topics in China’s crop protection industry, and select one or two topics out of these news and information to compose an in-depth feature article. You can obtain professional and insightful intelligence, covering market dynamic, industry development, government policies and more by going through the features articles every month.

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and consultancy service. 

For more information, please visit http://www.cnchemicals.com.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606

Email: econtact@cnchemicals.com

China takes anti-dumping measures on Indian and Japanese pyridine import

On May 27, 2013, the Ministry of Commerce of P. R. China issued an announcement that China preliminarily judged that Indian and Japanese companies dumped pyridine to China, which damaged China's pyridine industry. The certain period of this pyridine dumping investigation was July 1, 2011-June 30, 2012, and the certain period of China's pyridine industry injury was Jan.1, 2008-June 30, 2012.
 
From now on Chinese companies import pyridine from those companies will be levied guarantee funds by China's customs based on their margin of dumping. In detail, as for Indian companies, the guarantee funds levy ratio of Jubilant Life Sciences Limited is 24.6%, while that of other Indian companies is 57.4%. As for Japanese companies, the guarantee funds levy ratio of all Japanese companies who exported pyridine to China is 47.9%, including Koei Chemical Co., Ltd., Daicel Corporation and Nippon Steel Chemical Co., Ltd., etc. (Guarantee funds=Import price*Guarantee funds levy ratio *1+VAT rate of imported goods )

According to the Ministry of Commerce's announcement, this anti-dumping investigation on pyridine products in China was initiated by Chinese pyridine manufacturers. China's four major pyridine manufacturers, namely Anhui Guoxing Biochemical Co., Ltd., Nanjing Redsun Biochemical Co., Ltd., Weifang Luba Chemical Co., Ltd. and Nantong Reilly Chemical Co., Ltd., submitted the application for investigation formally on Aug. 2, 2012.
 
The four applicants indicated that Japanese and Indian companies dumped pyridine products in China during 2008–H1 2012 by ways of increasing quantity and decreasing price. Owing to the low-price dumping, as indicated by the four applicants, the total market share of pyridine products from Japan and India has floated around 20% in China these years, which oppressed Chinese pyridine industry severely, for example, causing price inhibition, oppression on gross profit margin, sluggish investment return, employment atrophy and so forth. 
 
Shown by the data from the Ministry of Commerce's announcement, China's pyridine capacity and output have kept increasing in recent years. The domestic sale volume and revenue are also experiencing an increase. However, oppressed by the low price of pyridine from Japan and India, domestic pyridine manufacturers had to lower their pyridine prices, which caused slipped gross profit these years. In detail, the domestic gross profit of pyridine was about USD4.74 million with a year-on-year decrease of 39% in 2011, although the sale revenue saw a year-on-year growth of 14%.
 
Fortunately, affected by the investigation, the domestic pyridine price has seen a continuous uptrend from Aug. 2012 to early June 2013. In detail, the ex-factory price of pyridine 99.9% kept increasing from USD4,145/t in Aug. 2012 to USD5,531/t in May 2013 without sharp fluctuations. On May 31, 2013, the delivery price of pyridine in Shanghai Port from Jubilant Life Sciences Limited was about USD6,520/t (RMB40,000/t), while it was about USD4,824/t (RMB30,000/t) in early Nov. 2012. It's predicted that with increasing profit, pyridine business also stimulates pyridine companies' financial performance in 2013.

The news above was sourced from Herbicides China News issued by CCM in June

Table of Contents of Herbicides China News 1306:
Nanjing Redsun and Hubei Sanonda see increase in stock price
Noposion's raising projects start to get profit
CAC Nantong completed 400t/a fluorochloridone and 400t/a asulam TC production lines
Anhui Futian plans for 600t/a mesotrione TC production line
Jiangsu CF to construct 2,4-D project
Lianyungang Langxuan aims at 2,4-D market
China's new pesticide enterprise, Yancheng Taihe, with USD17.67 million project
China takes anti-dumping measures on Indian and Japanese pyridine import
Pendimethalin sees mediocre development in China
Atrazine experienced intense supply in early June 2013
Export volume of picloram increased in 2012
Export business of isopropylamine facing slightly gloomy situation
17 new registrations of herbicide technical in China in May 2013
Price Review in June 2013

Herbicides China News, a monthly publication issued by CCM on 15th, provides you with the latest occurrences, exclusive analysis on the market trend as well as professional reviews on competitiveness of companies, products and relative industries in China’s herbicide industry.

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and consultancy service. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com


DuPont and Tronox lead the third wave of TiO2 price increases in 2013

TiO2 prices are increasing again! On May 30, 2013, both DuPont and Tronox announced a TiO2 price increase. It was the third wave of TiO2 price increases by international TiO2 giants in the year so far. The first wave occurred at around the end of Feb. 2013, led by Kronos, Huntsman, Cristal and ISK. The second wave came on May 9, 2013, led by Kronos. Relatively speaking, DuPont and Tronox acted more prudently in their price increase strategy, according to TiO2 China Monthly Report issued by CCM in June.
 
In detail, Tronox announced that the prices of its TiO2 products sold in Latin America and Asia Pacific will be raised by a minimum of USD175/t; those sold in Japan will be raised by a minimum of USD228/t; those sold in Europe, Middle East and Africa will be raised by a minimum of USD162.5/t or USD175/t in US Dollar markets; those sold in North America will be raised by a minimum of USD132.3/t. The announcement will become effective on June 1, 2013 or as contracts allow. At the same time, DuPont also announced that the prices for DuPont™ Ti-Pure® TiO2 sold in Asia Pacific and Latin America will be raised by USD200/t; those sold in Euro zone markets in Europe, the Middle East and Africa will be raised by about USD208/t or USD200/t in US Dollar markets; those sold in North America, in addition to paper and paperboard applications, will be raised by about USD176.4/t. The announcement will become effective on July 1, 2013 or as contracts allow.
 
The condition of the domestic TiO2 market is quite different from overseas TiO2 market. In mid-May, domestic rutile TiO2 was sold at around USD2,600/t, decreasing by about 15% compared to that in mid-Jan. 2013, ignoring the consecutive price increase announcement of international TiO2 giants. The real estate industry recovery in the U.S. and widespread production reduction of TiO2 producers in 1Q 2013 caused the international giants to hold an optimistic view in anticipation of booming TiO2 demand in the future, driving them to announce price increases again and again. While the domestic TiO2 market heavily depends on the consumption of domestic downstream industries, as the de-stocking process has been progressing and the current domestic TiO2 selling prices are close to the unit production cost, it is estimated that the domestic TiO2 market might touch the bottom around July this year.

Table of Contents of TiO2 China Monthly Report 1306:
Editor's notes
Headlines of this issue
Industrial Information
Import volume of TiO2 was up 15.70% while export volume was down 13.00% in
April 2013
Total titanium feedstock supply volume was flat in April compared with that in March
Domestic TiO2 price still in a downtrend in June 2013
Company dynamics
Shandong Dongjia is undergoing the "reply to feedback" process under its IPO 
application
DuPont and Tronox lead the third wave of TiO2 price increases in 2013
Tianzhu Peng: lower electricity price can benefit the TiO2 production in Panzhihua Vanadium & Titanium Industrial Base
Upstream
Hong Kong Guangxin defaulted on the ilmenite trade contract signed with Zero-seven
Downstream
Valspar to acquire European Industrial Coatings Company Inver Group
Housing prices rose in May although state control remained stringent
Domestic automobile production in the first five months of 2013 increased by
13.49% YoY

Titanium Dioxide China Monthly Report, issued by CCM on 25th, is mainly comprised of five columns of news and reports related to TiO2 market, including “Supply & Demand”, “Company Dynamics”, “Upstream”, “Downstream” and “Price Update”. You can find out more business opportunities through the latest and helpful information provided in the report.

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and Consultancy Service. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com


Global Bio-Chem and Global Sweeteners cooperate with ADM


In detail, according to ADM's indication, it will be the exclusive sales channel for several of Global Sweeteners' sweetener products. The marketing territory of the company will include various Southeast Asian countries, the Far East, Australia and New Zealand from June 2013. ADM maintains several regional sales offices in Asia, including those in China, India, Singapore, Japan and Australia.

Furthermore, ADM will also use its expansive marketing and sales network to distribute a variety of Global Bio-chem's lysine products to customers in South American countries such as Brazil and Argentina. As is known, lysine is a kind of amino acid commonly used by livestock producers to improve the nutritional value of animal rations. Global Bio-chem is one the world's leading lysine producers and ADM is a market leader of lysine in South America. As a result, it's beneficial for these two companies' further development.

"ADM is pleased to have the opportunity to provide many of the high-value products in Global Bio-chem's portfolio to our extensive network of customers in Asia and South America," said Ismael Roig, President of ADM Asia-Pacific. "This collaboration leverages the strengths of both companies for the benefit of customers, and we anticipate a positive response on both continents."

According to the 2012 annual report of Global Bio-chem, its revenue was USD1.53 billion in 2012, which decreased by 17% compared with USD1.84 billion in 2011. Moreover, its gross profit even decreased by 54% year on year, touching USD197 million in 2012 due to the increasing costs (mainly from corn) and lower sales prices of products.

The amino acid business is still the most important business of Global Bio-chem. The revenue and gross profit of the sector accounted for 54% and 93% of the company's total in 2012 respectively. However, due to the gloomy market in the feed industry and the lower sales price of lysine, the average sales price of the company's amino acids decreased by 19% compared with that in 2011 and the gross profit of the business also decreased by 46% year on year. According to the prediction by the company, it plans to expand its total capacity of lysine to 800,000t/a in 2013. As stated in the 2012 annual report of the company, its products faced intense competition from other players in the domestic market, while in the overseas market, it succeeded in maintaining stability in the sales volume and price of its products. As a result, the revenue from the company's export business in 2012 increased by 10% year on year. Thus, through the cooperation with ADM, it will facilitate Global Bio-chem's expansion of its lysine business around the world.

In addition, Global Sweeteners' revenue increased by 5.7% year on year in 2012, reaching USD583 million, but its gross profit decreased by 35.6% in 2012 over 2011. In 2012, the domestic price of sugar decreased, reducing the competitiveness of and demand for sweeteners. Furthermore, the increasing costs from raw materials and gloomy sales prices of products adversely impacted the gross profit of Global Sweeteners.

Entering into 2013, the price of sugar in China may continue to decrease. However, the new production lines of F55 HFCS in the Shanghai plant of Global Sweeteners will be put into full operation in 2013. As a high value-added product, F55 is expected to be a new profit growth source for the company since it is a popular sweetener in the beverage industry in the international market.

ADM is one of the world's leading agricultural product processors, with products mainly covering food ingredients, animal feeds and feed ingredients, biofuels and other products.

Table of Contents of Corn Products China News 1306:
Planting area of corn in China may keep on increasing in 2013
USDC announces final determination on anti-dumping investigation into China-made xanthan gum
China's VB2 export volume increases by 37.4% year on year in April
Chinese corn products Imp. & Exp. analysis in April 2013
Price update of corn products in June
Ex-works price of corn germ meal in China stays high in June 2013
Domestic market price of DDGS rebounds in May 2013
Fufeng Group's gross profit margin expected to rebound in 2013
Star Lake Bioscience sees sharp decrease in net profit in 2012
Global Bio-Chem and Global Sweeteners cooperate with ADM
NDRC publishes a new notice about crop straw utilization
COFCO to import 60,000 tonnes of corn from Argentina in 2013
China launches the second batch reserve of sugar in 2012/2013


CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and Consultancy Service. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com


Global Bio-Chem and Global Sweeteners cooperate with ADM

On June 6, 2013, Global Bio-chem Technology Group Co., Ltd. (Global Bio-chem) and Global Sweeteners Holdings Limited (Global Sweeteners) announced that they will cooperate with Archer Daniels Midland Company (ADM) for a year. After this operation, ADM will be the sole distributor of Global Bio-chem's lysine and Global Sweeteners' sweetener products in Asian and South American markets respectively. Moreover, according to this cooperation, the Global group can develop more effective technologies through the help of ADM.

In detail, according to ADM's indication, it will be the exclusive sales channel for several of Global Sweeteners' sweetener products. The marketing territory of the company will include various Southeast Asian countries, the Far East, Australia and New Zealand from June 2013. ADM maintains several regional sales offices in Asia, including those in China, India, Singapore, Japan and Australia.

Furthermore, ADM will also use its expansive marketing and sales network to distribute a variety of Global Bio-chem's lysine products to customers in South American countries such as Brazil and Argentina. As is known, lysine is a kind of amino acid commonly used by livestock producers to improve the nutritional value of animal rations. Global Bio-chem is one the world's leading lysine producers and ADM is a market leader of lysine in South America. As a result, it's beneficial for these two companies' further development.

"ADM is pleased to have the opportunity to provide many of the high-value products in Global Bio-chem's portfolio to our extensive network of customers in Asia and South America," said Ismael Roig, President of ADM Asia-Pacific. "This collaboration leverages the strengths of both companies for the benefit of customers, and we anticipate a positive response on both continents."

According to the 2012 annual report of Global Bio-chem, its revenue was USD1.53 billion in 2012, which decreased by 17% compared with USD1.84 billion in 2011. Moreover, its gross profit even decreased by 54% year on year, touching USD197 million in 2012 due to the increasing costs (mainly from corn) and lower sales prices of products.

The amino acid business is still the most important business of Global Bio-chem. The revenue and gross profit of the sector accounted for 54% and 93% of the company's total in 2012 respectively. However, due to the gloomy market in the feed industry and the lower sales price of lysine, the average sales price of the company's amino acids decreased by 19% compared with that in 2011 and the gross profit of the business also decreased by 46% year on year. According to the prediction by the company, it plans to expand its total capacity of lysine to 800,000t/a in 2013. As stated in the 2012 annual report of the company, its products faced intense competition from other players in the domestic market, while in the overseas market, it succeeded in maintaining stability in the sales volume and price of its products. As a result, the revenue from the company's export business in 2012 increased by 10% year on year. Thus, through the cooperation with ADM, it will facilitate Global Bio-chem's expansion of its lysine business around the world.

In addition, Global Sweeteners' revenue increased by 5.7% year on year in 2012, reaching USD583 million, but its gross profit decreased by 35.6% in 2012 over 2011. In 2012, the domestic price of sugar decreased, reducing the competitiveness of and demand for sweeteners. Furthermore, the increasing costs from raw materials and gloomy sales prices of products adversely impacted the gross profit of Global Sweeteners.

Entering into 2013, the price of sugar in China may continue to decrease. However, the new production lines of F55 HFCS in the Shanghai plant of Global Sweeteners will be put into full operation in 2013. As a high value-added product, F55 is expected to be a new profit growth source for the company since it is a popular sweetener in the beverage industry in the international market.

ADM is one of the world's leading agricultural product processors, with products mainly covering food ingredients, animal feeds and feed ingredients, biofuels and other products.

Table of Contents of Corn Products China News 1306:
Planting area of corn in China may keep on increasing in 2013
USDC announces final determination on anti-dumping investigation into China-made xanthan gum
China's VB2 export volume increases by 37.4% year on year in April
Chinese corn products Imp. & Exp. analysis in April 2013
Price update of corn products in June
Ex-works price of corn germ meal in China stays high in June 2013
Domestic market price of DDGS rebounds in May 2013
Fufeng Group's gross profit margin expected to rebound in 2013
Star Lake Bioscience sees sharp decrease in net profit in 2012
Global Bio-Chem and Global Sweeteners cooperate with ADM
NDRC publishes a new notice about crop straw utilization
COFCO to import 60,000 tonnes of corn from Argentina in 2013
China launches the second batch reserve of sugar in 2012/2013


CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and Consultancy Service. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606

Email: econtact@cnchemicals.com

High-toxic insecticide aldicarb involved in food safety scandal

In May 2013, an insecticide namely aldicarb (Brand name in Chinese: Shennongdan) involved in a food scandal which happened in the rural areas of Weifang City, Shandong Province. It has been confirmed that some farmers in the areas had been overusing aldicarb, which is an illegal and highly toxic insecticide to grow gingers, leading to public condemnation. The increasing number of food safety scandals these years in China not only indicates the weakness of pesticide supervision and management, but also reflects farmers' habit of choosing pesticides: pursuit for low price, quick and high efficacy in China, according to CCM’s latest issue of Insecticides China News.

As a highly poisonous carbamate insecticide, just 50 milligrams of aldicarb is enough to kill a person weighing 50kg. According to the Institute for the Control of Agrochemicals, Ministry of Agriculture (ICAMA), aldicarb is only allowed to use on cotton, tobacco, peanuts, roses and sweet potatoes under highly strict rules on application. However, on 4 May, 2013, an investigative report by China Central Television (CCTV) revealed that farmers in Weifang had been using 120-300kg/ha. aldicarb for growing gingers, nearly three to six times above the safe level for targeted crops mentioned above. This is entirely a threat to public health and infringement to the rules of the ICAMA.

What's more shocking is that ginger farmers actually did recognize aldicarb's toxicity. One interviewee said that she was aware of the high toxicity of the product and dared not to use it in fields where gingers are grown for export and her family, her aldicarb-contaminated gingers were sold on the domestic markets. Another respondent said he had been using aldicarb for more than 20 years since it was first introduced to the market, as it has a stronger control effect on insect pests and nematodes and a lower price than other products.

There are multiple reasons for the emergence of aldicarb-contaminated gingers and other food safety scandals in China during the past years. Firstly, most farmers choose and apply pesticides based on the price of pesticides and their experiences. They used to purchase cheaper pesticides with quick effect but high toxicity instead of eco-friendly products with low toxicity. While spraying pesticides, they usually ignored the introductions on package, undereducated and unaware that they should comply with the introductions.

Secondly, the food safety scandals witness weak supervision on pesticide management and food safety. As mentioned above, the farmers in Weifang had already used aldicarb on gingers with a volume exceeding safe level for a long time, but what is surprising is that the circulation and application of aldicarb have not been inspected by authorities in these years; aldicarb-contaminated gingers were not identified during food safety inspections until they were marketed across China.

Besides, the lack of legal and effective insecticides is another reason for the ginger scandal. Like other minor crops in China, ginger doesn't draw enough attention of agrochemical enterprises for R&D or registration of applicable corresponding insecticides, as the economic return generated from investment in pesticides on minor crops is reckoned to be less than that in major crops. According to the ICAMA, there's only one valid registration of insecticide for ginger–98% methyl bromide GA–in China as of 13 May, 2013. This is far from enough to fulfill the demand of controlling ginger insect pests.

Along with more and more food safety scandals exposed by media these years, Chinese authorities would have to tighten its inspection on both pesticide management and food safety and be more accountable to improve the overall supervision mechanism in the future. Enhancing the ability and efficiency of law enforcement is considered to be primarily imperative. Meanwhile, boosting the development of eco-friendly pesticides and improving farmers' technological knowledge of pesticide application are required in the long run. Furthermore, it is advised that the government should strongly support the pesticide registration for minor crops, such as providing financial subsidies, just like Zhejiang Province did (please refer to Insecticide China News Volume 06 Issue 02 on Page Nine, Water bamboo receives pesticide registration subsidy in Zhejiang Province).

Different from China, some of other countries and regions in the world have washed out aldicarb. In 2010, the US Environmental Protection Agency (EPA) and Bayer agreed to carry out an entire ban on aldicarb use in the US: all remaining aldicarb uses will end no later than August 2018, as a new risk assessment conducted by the EPA indicated that aldicarb no longer met food safety standards. In 2012, both Brazil and Peru repealed the registrations of aldicarb and started to forbid the product for sale.

Table of Contents of Insecticides China News 1306:
Will EU-wide ban on three neonicotinoids affect China?
High-toxic insecticide aldicarb involved in food safety scandal
Dow to introduce sulfoxaflor to China
Hunan Huinong's tea saponin biopesticide to come out in H2 2013
Doramectin to be applied as insecticide in China
Remarkable growth of pymetrozine registrations continues
Qiheng Agro-chemical to receive investment from listed household chemical company
Redsun Biochemical to shut down compulsively required by government
Jiangsu Changqing to enhance wastewaster treatment and warehouse management
Anhui Futian to set foot in insecticide production
Agrochemical multinationals actively invest in China's pesticide industry
Hunan Haili intends to produce thiodicarb TC (4,000t/a) for export
Bifenthrin export 2012: rises in TC export volume but declines in value
Monthly ex-works prices of main insecticides in China, June 2013
Monthly port prices of main insecticides in China, June 2013
Monthly FOB prices of main insecticides in China, June 2013

Insecticides China News, a monthly publication issued by CCM on 10th, provides the latest and influential analysis on insecticide industry. Major contents include special report, company dynamics, market dynamics, supply and demand, price analysis, policy, raw material and intermediate.

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and consultancy service. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com


Hubei Xingfa foresees a profit down in H1 2013

On June 3rd, 2013, Hubei Xingfa Chemicals Group Co., Ltd. (Hubei Xingfa) reported it expects to report a 30-50% decline in net profit in the first half of 2013, compared to USD25.66 million of net profit in H1 2012, according to CCM’s Phosphorus Industry China Monthly Report issued in June.

Hubei Xingfa attributed the expected profit drop to the following three points:

Firstly, the market price of phosphorus ore is declining while the cost of phosphorus mining is rising.

Secondly, electricity costs have risen sharply because of drought. Hubei Xingfa gets most of its electricity from hydropower it owns. But drought has caused Hubei Xingfa to buy more electricity from more expensive outside sources than last year to maintain production.

Thirdly, the company's newly launched 600,000t/a DAP project has suffered losses. The project came on stream at the end of 2012, and is operated by wholly owned subsidiary Yidu Xingfa Chemical Co., Ltd. (Yidu Xingfa). Obviously, Hubei Xingfa overestimated the tendency of phosphate fertilizer market.

Hubei Xinfa's performance reflects the status of China's entire phosphorus chemical industry. While phosphorous ore business has been highly profitable in recent years, margins of the phosphorus chemical industry are getting thinner as gloominess in the downstream phosphate fertilizer market spread to the upstream phosphorus ore market. New projects face a tough time generating profitability, and the profit margin of phosphorus manufacturing firms in the entire industry is being squeezed.

Editor's Note
Headlines of Phosphorus Industry China Monthly Report 1306
Phosphorus Ore
Yuntianhua completes asset reorganization
Hubei Xingfa foresees a profit down in H1 2013
Yellow phosphorus
Yunnan publishes energy consumes across local yellow phosphorus industry
Phosphate Fertilizer
CPFIA to work out schemes for weeding out excess phosphate fertilizer capacity
Rapid appreciation of RMB to aggravate China's phosphate fertilizer export
Investment on fertilizer project went up in Q1 2013
Fine Phosphate Chemicals
Phosphorus flame retardant foresees huge growth potential
Global Insight
Saudi Arabia breaks into China's phosphate fertilizer market
Brief News
Guizhou Province to launch Technology Roadmap for local phosphorus chemicals industry
Jinchang City to construct a sulfur-phosphorus industrial park
China to make rules for stacking phosphogypsum
Supply & Demand
Market review of prime phosphate chemical in May 2013
Import & Export
International trade of phosphate chemicals in April 2013
Price Update
Price monitoring of some phosphate chemicals in May 2013

Phosphorus Industry China Monthly Report, issued by CCM on 15th, keeps providing the latest company dynamics related to China’s phosphorus industry, and market analysis on supply and demand, import and export as well as global insight.

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and consultancy service. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com


Mengniu + Danone Combine to Accelerate Yoghurt Business

On 20 May, Mengniu announced that its majority shareholder, COFCO, has signed an agreement with Danone, to form a JV named Prominent Achiever. COFCO has agreed to transfer 148,014,022 shares in Mengniu to the JV, in which COFCO and Danone will own stakes of 51% and 49% respectively. After the transaction, COFCO will continue to be the single largest shareholder in Mengniu (with a stake of 27.8%, which was 28.1% before the transaction). Danone will become a shareholder in Mengniu, owning a stake of about 4% initially, with the aim of increasing the stake in the future.

In addition, on the same day, Mengniu signed a framework agreement with Danone to establish a JV for the production, promotion, marketing and sales of yoghurt products (including the typical Danone range of yoghurt, yoghurt drinks and spoonable dairy-based desserts) in China, with the aim to reorganize and restructure their respective yoghurt business in China and developing an extensive yoghurt product portfolio. After that, Danone will own 20% and Mengniu 80% of the new JV (a separate project to Prominent Achiever). Danone will invest about a total of USD419.9 million (RMB2.6 billion) in the 2 cooperation projects which are now in the phase of getting the approval of the relevant government authorities, a process likely to take a few months.
 
The intention is that the cooperation will leverage both businesses’ advantages in marketing, management and sales channel in the dairy sector. Mengniu’s performance has been mediocre of late, possibly in part due to the management of COFCO, although product scare incidents have been the key factor. The cooperation with foreign dairy giant Danone may help COFCO redynamise the business.

The strategy should enable Danone to expand its market share in China. As a leading dairy processor, Mengniu has a powerful distribution network and its brand reputation is relatively strong in China. In 2012, according to Mengniu’s financial report, its sales of yoghurt were USD741.6 million (RMB4.6 billion), representing 0.8% y-o-y growth.

Danone has tried for years to expand its yoghurt business in China. Previous attempts at partnerships with Chinese companies such as Bright Dairy and Wahaha failed due to troubled relationships with its local partners and resulted in substantial losses. These setbacks prompted Danone to attempt to expand its business locally independently but this also foundered, with the company stopping production in its 200,000 t/yr Shanghai yoghurt plant (please see Dairy Products China News Vol.5 January Issue, p8).

Given this background, Danone has witnessed a major loss in market share in China. According to Euromonitor, its market share of yoghurt decreased sharply to 1.6% from 11.4% in 2008. At present, Danone mainly sells its yoghurt in Beijing, Shanghai and Guangzhou, but faces fierce competition from the large dairy processors in these regions, such as Bright Dairy and Yili, which performs well in the yoghurt sector.

The deal should also benefit Mengniu, helping it to build its reputation for high quality products. Mengniu is likely to achieve breakthroughs in the premium yoghurt sector with the aid of Danone’s expertise in quality and product innovation. Mengniu has been making a number of efforts to promote its dairy business through cooperation deals. In May, it increased its stake in China Modern Dairy Holdings from 1% to 28% to secure a stable, long-term premium milk supply. Last year, Arla Foods became Mengniu’s 2nd largest strategic shareholder, and a long-term strategic cooperation project was launched. Above all the company is now highly risk averse after the food scare problems which dented its sales, making it keen to increase customers’ trust in its products through the “halo effect” of foreign cooperations.

The cooperation will exert great pressure on the other yoghurt players, and the rivalry with Bright Dairy will be especially fierce. Bright Dairy leads the Chinese yoghurt market with a share reported at around 20% last year. According to Mengniu, the combined market shares of Danone and Mengniu accounted for a share of around 21% in 2012, with combined sales of about USD0.64 billion (RMB4.0 billion) in yoghurt sector. Figures from Euromonitor showed slightly lower figures, with Mengniu at 16.8% and Danone at 1.6%. Whatever the exact position, there is no doubt that the cooperation will pose a significant threat to the currently strong position of Bright Dairy.

However, the cooperation may be difficult to progress well in practice – and not simply because of the partners in this particular case. Even when such partnerships work relatively well at the beginning, one partner company will often ultimately seek control. Of course, Danone had a JV with Mengniu in 2006 which ended in failure, reportedly as a result of both sides’ attempts to seek a controlling stake. So how long the new cooperation will last remains to be seen.

The news above was sourced from Dairy Products China News, issued by CCM in May.

Table of Contents of Dairy Products China News 1305:
Interview with Changfu Dairy
Rapid Development of Milkbars
Key Processor Results for 2012
Dairy Industry Recovery Status in Q1
Trends in IMAR Highlight Key Dairy Sector Changes
Government Strengthens Raw Milk Supervision
Jiabao Dairy Launches New Yoghurt Plant
Mengniu + Danone Combine to Accelerate Yoghurt Business
Yili Proves an Active Marketer
Bright Dairy to Set Up New Farm
Gansu Launches Large-scale Dairy Farm Project
Xuelan Launches “Memory Yoghurt”


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