Huntsman's acquisition of Rockwood's TiO2 business likely to make the global TiO2 industry more concentrated among fewer enterprises

The disappointing market conditions in the global TiO2 industry has lasted for more than one year since mid-2012, and is likely continue into the future. This will force producers to reconsider whether to persevere with businesses that have low future growth expectations, or to divest from them, according to Titanium China Monthly Report issued by CCM in October.

Rockwood Holdings Inc. (Rockwood) selected the latter course of action and divested from its TiO2 business. On Sept. 17, 2013, Rockwood announced that it has reached a definitive agreement with Huntsman Corporation (Huntsman) to sell its TiO2 business. After several months' search for suitable buyers and concessions, Rockwood finally divested from its TiO2 business. The TiO2 business is valued at USD1.33 billion, including the assumption of USD225 million in pension obligations and subject to other customary adjustments. The final transaction value was much lower than Rockwood's expectation of USD2.00 billion as most investors were cautionary amidst the current sluggish market conditions. The transaction is expected to close during the first half of 2014, following regulatory approvals.

As the sluggish market conditions make the competition more intensive, some enterprises have been forced out of the industry. The industry is predicted to become more concentrated among a smaller number of enterprises, and the pricing power of international giants is likely to be strengthened. According to the public data of Rockwood, it had a TiO2 production capacity of about 340 thousand tonnes in 2012, ranking sixth worldwide. Huntsman is ranked fourth worldwide, taking about 9% of the global market share and producing about 460 thousand tonnes of TiO2 in 2012.

By acquiring Rockwood's TiO2 business, Huntsman will become the second largest TiO2 producer worldwide with approximately 14% of the global market share. DuPont is the largest TiO2 producer in the world, with a global market share of 20% in 2012.

Whether the mergers & acquisitions trend in the global TiO2 industry will catch on in China is uncertain. First of all, China's economy is not a totally free market economy, and most domestic mergers & acquisitions are led by local government. The involvement of governments makes mergers and acquisitions more complex. Secondly, 80% of domestic producers have a production capacity that is less than 100,000t/a, which makes mergers and acquisitions less attractive for potential buyers. In addition to this, the risk of failing to develop a synergy between the two companies means that the big producers would prefer to increase their production capacity rather than merging with or acquiring another producer. Thirdly, the punishment implemented by the environmental protection departments is lenient. Usually, companies that cause heavy pollution are given a fine of only USD30–USD40 thousand. Thus, many small producers would simply pay the fine and continue operating rather than stop or quit production.

Table of Contents of TiO2 China Monthly Report 1310:

Import volume declined by 9.42% while export volume kept growing in Aug.

Total titanium feedstock supply volume increased by 17.81% in Aug.

Domestic TiO2 price slightly increased from mid-Sept. to mid-Oct. demand turned warmer

Domestic TiO2 price may increase as DuPont and Huntsman lead the fourth wave of price increases in 2013

Huntsman's acquisition of Rockwood's TiO2 business likely to make the global TiO2 industry more concentrated among fewer enterprises

Changzheng Electric to enter into the upstream TiO2 industry through asset replacement Letong Chemical announces the withdrawal of its application to raise capital for a 30,000t/a ink project

Abnormal weather and upgrading of existing waterproofing construction generate bright prospects for domestic waterproofing coatings producers

Titanium Dioxide China Monthly Report, issued by CCM on 25^th, 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.

About CCM

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.
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Tel: 86-20-37616606

Email: econtact@cnchemicals.com

ChemChina to integrate its agrochemical assets

According to CCM’s lately released newsletter, Herbicides China News 1310, on Sept. 10, 2013, Hubei Sanonda Co., Ltd. (Hubei Sanonda) announced that Celsius Property B.V. (Celsius) will acquire 148.48 million of its B shares. The acquisition arouses speculation that China National Chemical Corporation (ChemChina) has begun to restructure its agrochemical assets, as Celsius is a Dutch company controlled by Makhteshim Agan Industries Ltd. (Makhteshim Agan), a subsidiary of ChemChina. The purpose of ChemChina's indirect acquisition of Hubei Sanonda is to strengthen its control for the company by increasing its shareholdings.

The 148.48 million B shares of Hubei Sanonda to be acquired by ChemChina representing 65% of Hubei Sanonda's B share capital, or 25% of the company's total share capital. As the practical controlling shareholder, ChemChina's stake in Hubei Sanonda will rise to around 45.15% from the present 20.15%. This acquisition will cost approximately USD126.38 million, or USD0.85/share.

Notably, the acquisition price is much higher than the closing price before the suspension of Hubei Sanonda's B shares. Since July 30, 2013, Hubei Sanonda's shares (A shares and B shares) have been suspended because of this acquisition. The acquisition price is a premium of approximately 26% on the closing price, and is approaching towards the record high price which is USD0.91/share. 

The announcement also revealed that ChemChina is acquiring Hubei Sanonda in order to actively implement the globalization plans for its agrochemical business, and to further strengthen the synergies between the company and its subsidiaries at home and abroad. Insiders believe that ChemChina is planning to use Makhteshim Agan as the platform to restructure its agrochemical assets and business operations.

This acquisition is likely to be the beginning of ChemChina's agrochemical asset integration. According to Hubei Sanonda's announcement, ChemChina plans to follow up on this acquisition by also purchasing Hubei Sanonda's A shares.  Makhteshim Agan has not ruled out the possibility that it will within the next 12 months acquire Hubei Sanonda's A shares, which are now indirectly held by ChemChina through Celsius or its other holding subsidiaries. This is in accordance with the strategic arrangement between ChemChina and Makhteshim Agan.

ChemChina has had long-held plans to restructure its agrochemical assets. In May 2012, ChemChina originally planned to restructure its agrochemical assets by using Hubei Sanonda as a platform. The company intended to inject quality assets into Hubei Sanonda, including 80.93% equity of Jiangsu Anpon Electrochemical Co., Ltd. (Jiangsu Anpon) and 70% equity of Jiangsu Huaihe Chemical Co., Ltd. (Huaihe Chemical). Both Jiangsu Anpon and Huaihe Chemical are ChemChina's subsidiaries which operate in the agrochemical sector. However, this plan eventually failed in Nov. 2012 for various reasons.

ChemChina is likely to continue to restructure its subsidiaries in the future. This is because ChemChina has many subsidiaries and many overlapping businesses in its subsidiaries. Restructuring will help resolve problems such as intra-industry competition and operational coordination. Up to now, ChemChina's portfolio of agrochemical enterprises mainly includes Makhteshim Agan, Hubei Sanonda, Cangzhou Dahua Group Co., Ltd., Jiangsu Anpon, Anhui Petroleum & Chemical Group Co., Ltd. and Huaihe Chemical.                                                               Hubei Sanonda performed quite strongly in the first half of 2013, according to Hubei Sanonda's 2013 semi-annual report. Its operating revenue and net profit both witnessed a significant increase, growing by 36.08% and 431.43% year-on-year respectively. The significant growth in net profit was mainly due to the increase in the output, the sales volume and the sales prices of the company's main products. The output of the company's chemical pesticides (100% consistency) reached 33,200 tonnes during this period, increasing by 58.79% compared with the same period of last year. Additionally, the company's export revenue was approximately USD128 million, representing a year-on-year growth of 34.28%.   

Table of Contents of Herbicides China News 1310:

FOB Shanghai of main herbicides in China, Oct. 8, 2013

Shanghai port prices of main herbicides in China, Oct. 8, 2013

Ex-factory prices of main herbicides in China, Oct. 8, 2013

Ex-factory prices of key herbicide raw materials in China, Oct. 8, 2013

Shandong Qiaochang to be first domestic company producing imazamox

Noposion to acquire another 20% stock equity of Jiangsu Changlong

Bohan Chemical to build world's largest production base of oxadiazon technical

Huapont Nutrichem intends to acquire two chemical companies

Seven glyphosate companies step into 2012 China Top 20 Pesticide Enterprises

China's total profit of pesticide industry surges by 40.5% YoY, Jan.-Aug. 2013

Shandong's total profit of pesticide industry up 44.8% YoY, Jan.-July 2013

MOFCOM extends anti-dumping investigation period against pyridine

Hubei Sanonda's export revenue enjoys significant growth, 2013

Paraquat AS substitutes developed in China

China's herbicide exports witness growth, Jan.-Aug. 2013

Export volume of China's acetochlor TC declines sharply, H1 2013

China newly approves ten herbicide products' formal registrations

MOA bans three more long residual herbicides

ChemChina to integrate its agrochemical assets

Herbicides China News, a monthly publication issued by CCM on 15^th, 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.

About CCM

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.
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Email: econtact@cnchemicals.com

Noposion to plan an asset reorganization in July 2013

According to Herbicides China News 1307 issued by CCM, On July 8, 2013, Shenzhen Noposion Agrochemicals Co. Ltd. (Noposion) announced that its stocks (stock No. 002215) would be suspended from trading from that date onwards due to a significant asset reorganization planned by the company. According to the announcement, Noposion is committed to lay out the proposal of the asset reorganization before August 6, 2013. After the proposal is approved by the company's board of directors and announced to the public, its stock will resume trading.

After the announcement came out, many market participants suspect that the significant asset reorganization refers to the acquisition of Jiangsu Changlong Chemicals Co, Ltd. (Jiangsu Changlong), which is a pesticide technical supplier for Noposion. Jiangsu Changlong is one of the large-scale manufacturers of pesticide technical, ranking in the top ten of technical manufacturers in China. Market participants speculate that the sudden suspension of Noposion's stocks is probably due to Noposion's acquisition of Jiangsu Changlong.

Insiders from Noposion's Securities Department said that the company has been negotiating with Jiangsu Changlong about a possible acquisition. However, they were not at liberty to disclose the real reason for the suspension.

On March 26, 2013, Noposion announced that the company intended to acquire Jiangsu Changlong's shares. At that time, the company stated that the acquisition was still in the early stages, and that it had not yet signed any letter of intent. However, the company has not released any announcement regarding the details of the acquisition.

Some experts believe that Noposion will ensure stability in the source of raw materials especially for pesticides technical, diversify its product categories and enhance its marketing ability if it is successful in acquiring Jiangsu Changlong. It is no doubt that at present, Noposion's pesticide formulation varieties and marketing channels are far more advanced than its competitors. However, Noposion's competitive disadvantage is that it has no production bases for pesticide technical, which is the main upstream source. Acquiring Jiangsu Changlong could address this disadvantage.

Noposion, a listed company of producing pesticide formulation in China, engages in production, R&D and marketing of pesticide formulation. Its headquarters is located in Shenzhen City, Guangdong Province and its manufacturing base is in Dongguan City, Guangdong Province. Its products are mainly sold in the domestic market, especially East China, South China and Central China.

Currently, Noposion is one of the biggest agrochemical enterprises in China, with a pesticide formulation capacity of over 100,000t/a. In Q1 2013, Noposion's revenue was USD80.27 million (RMB505.71 million) with a net profit of USD7.61 million (RMB47.93 million). Its revenue and net profit increased by 11.43% and 13.26% year-on-year respectively. The company's net profit was predicted to increase by 10%-40% in H1 2013, reaching USD20.34 million-USD25.89 million (RMB128.15 million-RMB163.10 million).

Table of Contents of Herbicides China News 1307:

Editor's notes

Company Dynamics

Good Harvest-Weien continues to strengthen its sugarbeet herbicide business

Noposion to plan an asset reorganization in July 2013

Supply and demand

Jiangsu Institute of Ecomones obtains six herbicide registrations in H1 2013

Market Analysis

Overview of amide herbicides' market situation in China in May 2013

Diuron market remains weak in the first half of 2013

Corn herbicides to enjoy a bright prospect in the near future

Ex-works price of tribenuron-methyl 95% TC soared in early July 2013

Output and sales volume of paraquat TK declined in May 2013

Policy

MOA to strengthen risk monitoring of 2,4-D butylate

Hunan Province issued eight prohibitions on pesticide production in June 2013

Registration

Overview of China’s herbicide registration in H1 2013

Price Monitoring

Price Review in July 2013

News in Brief

Paraquat remains short supply in late June 2013

CCPIA set up Pesticide Additives Commission formally in June

Organic phosphorus herbicides maintain high sales ratio in May 2013

Hubei Sanonda’s net profit to increase by 420%-470% YoY in H1 2013

China to prohibit three long residual herbicides

China exports 32,264 tonnes of herbicides for retail in May 2013

Lier Chemical's net profit soared with YOY growth of 54.82% in H1 2013

Lanfeng Bio-chemical to set up a subsidiary

Herbicides China News, a monthly publication issued by CCM on 15^th, 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.

About CCM

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

Find Hot News in Glyphsoate China Monthly Report 1306

Published on the 20^th every month, Glyphsoate China Monthly Report is a monthly publication released by CCM. It offers timely update and close follow up of China’s various kind of Glyphsoate market dynamics, analyze the market data and trends. Major columns include the latest information and in-depth analysis on market trends, supply and procurement opportunities in raw materials and intermediates, technology process, price updates, new policies and company dynamic, etc.

Following are headline news of the latest issue of Glyphsoate China Monthly Report:

Glyphosate technical price decreases slightly in June 2013

Glyphosate technical price decreases slightly in June 2013.

China's glyphosate companies actively expand overseas business

Given that the overseas market has become more and more important and operating in diversification can make the income diversified, some China's glyphosate companies have actively expanded the overseas glyphosate market and other overseas business. These glyphosate companies include Nantong Jiangshan, Zhejiang Wynca, Sichuan Fuhua, etc.

Hengyang Roymaster's Jinyan Chemical Plant is ordered to rectify for environmental illegality

Hengyang Roymaster's Jinyan Chemical Plant was ordered to shut down and rectify for environmental illegality on 24 May, 2013, and the rectification was ordered to be completed before the end of Nov. 2013, meaning that it will be hard for Hengyang Roymaster to resume its 12,000t/a glyphosate production line before that time.

Result of glyphosate use survey for 2012 late rice planting in Hunan province

In order to establish key market indicators for China's rice industry, CCM carried out a survey concerning rice planting in Hunan Province's Changde, Yueyang and Hengyang since Dec. 2012, showing that glyphosate is one of the most important herbicides for weeding in these three districts in 2012.

The export volume of glyphosate technical decreases 14.31% in April 2013

The export volume of glyphosate technical decreases 14.31% in April 2013.

Glyphosate ammonium salt is the mainstream registration in May 2013

Among the 19 glyphosate product registrations in May 2013 the registration of glyphosate ammonium salt accounted for about 50% of the total, which implies that glyphosate ammonium salt was still the mainstream registration in May 2013.

Air pollutant emission standard for pesticide industry to be released by the end of 2014

China's Ministry of Environmental Protection claimed in April 2013 that it will release Air Pollutant Emission Standard for Pesticide Industry by the end of 2014, thus the glyphosate manufacturers in China will have a targeted air pollutant emission standard.

Nantong Jiangshan issues short-term financing bond

For the sake of repaying its short-term loan, Nantong Jiangshan issued the first phase of short-term financing bond of 2013 and received the financing bond's total amount of USD57.16 million (RMB350 million) on 22 May,2013.

Anhui Huaxing accomplishes non-public issuing stock plan

Anhui Huaxing claimed that it has completed the deal with CEFC Shanghai that CEFC Shanghai acquired the additional non-public shares issued by Anhui Huaxing with total investment of about USD314.76 million (RMB1,931.02 million), and thus CEFC Shanghai becomes the controlling shareholder of Anhui Huaxing with total shock proportion of 60.78%.

Environmental protection inspection storm to attack glyphosate industry

On 21 May, 2013, China's Ministry of Environmental Protection released a document——Notice Regarding the Environmental Protection Inspection against Glyphosate (PMIDA) Manufacturers, and the inspection will last to 2015, meaning that environmental protection inspection storm will keep attacking glyphosate industry for about 2 years and 6 months.  

About CCM

As a leading market research consulting company in China with more than 10-year-experience, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.cnchemicals.com.

Contact

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Fax: 86-20-37616968

Find Hot News in Glyphsoate China Monthly Report 1303

Published on the 20^th every month, Glyphsoate China Monthly Report is a monthly publication released by CCM. It offers timely update and close follow up of China’s various kind of Glyphsoate market dynamics, analyze the market data and trends. Major columns include the latest information and in-depth analysis on market trends, supply and procurement opportunities in raw materials and intermediates, technology process, price updates, new policies and company dynamic, etc.

Following are headline news of the latest issue of Glyphsoate China Monthly Report:

Anhui Huaxing’s operating profit surges in 2012

Anhui Huaxing Chemical Industry Co., Ltd. announced a flash report about its operating performance in 2012, showing that its operating profit was about USD17.01 million (RMB106 million) in 2012, up by 218.39% over 2011.

Nantong Jiangshan's equity proportion of Dongchang Chemical decreases again

Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. released an announcement about the second "Capital and share increase" plan of its affiliated company—Nantong Dongchang Chemical Co., Ltd., showing that Dongchang Chemical had successfully introduced a new investor with an investment of about USD8.87 million, and Nantong Jiangshan was degraded from the second biggest shareholder of Dongchang Chemical to the third biggest shareholder after the deal, with its equity proportion down to 30.078% from 46.640%.

Nufarm loses its exclusive distribution right for Roundup branded glyphosate in Australia and New Zealand

Nufarm Limited released an announcement, claiming that its exclusive distribution right for Roundup branded glyphosate in Australia and New Zealand are to be terminated on 28 Aug., 2013, and Sinochem Group, a Chinese company, will take over the exclusive distribution right of Roundup branded glyphosate in Australia and New Zealand.

The global GM crop planting area reaches 170.3 million hectares in 2012

International Service for the Acquisition of Agribiotech Applications released its updated Global Status of Commercialized Biotech/GM Crops 2012 report, showing that global's planting area of GM crops set the new record of 170.3 million hectares in 2012, and Brazil maintaining the largest growth rate in planting area of GM crops globally in 2012.

China cancels PMIDA's export tax rebate

According to a record from the China's State Administration of Taxation updated on 20 Feb., 2013, PMIDA's 13% export tax rebate rate has been cancelled since 1 Jan., 2013, meaning that China's exported PMIDA will no longer enjoy the rebate, which will increase PMIDA's export cost and further reduce PMIDA's export volume.

The intense competition in China's mainstream glyphosate export producers continues in 2012

After the depressed glyphosate market since 2009, some glyphosate manufacturers withdrawn from market, which increased the industrial concentration of China's glyphosate to a great extent in 2012. In the meantime, export share competition between China's top seven glyphosate manufacturers didn't show the signs of easing, but instead it remain fierce in 2012.

Glyphosate industry research dynamics subsequent to the promulgation of the Decree No. 1558

The promulgation of No. 1558 Decree greatly affected the research dynamic of the glyphosate industry in China, and the number of both glyphosate companies which carry out the research about glyphosate wastewater treatment techniques and the researches about glyphosate wastewater treatment techniques being applied to patent rose.

Lier Chemical successfully registers glyphosate•triclopyr in Feb. 2013

There is only one glyphosate registration in China in Feb. 2013, namely mixed glyphosate formulation—glyphosate·triclopyr SP (registration No. LS20130040), which contains 50% of glyphosate and 10% of triclopyr.

Glyphosate prices rise slightly in March 2013

Glyphosate prices rise slightly in March 2013.

The export volume of glyphosate formulations increases by 30.72% in Jan. 2013

Export volume of glyphosate formulations increases by 30.72% in Jan. 2013. 

About CCM

As a leading market research consulting company in China with more than 10-year-experience, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.cnchemicals.com.

Contact

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Tel: 86-20-37616606

Fax: 86-20-37616968

Find Hot News in Glyphsoate China Monthly Report 1212

Published on the 20^th every month, Glyphsoate China Monthly Report is a monthly publication released by CCM. It offers timely update and close follow up of China’s various kind of Glyphsoate market dynamics, analyze the market data and trends. Major columns include the latest information and in-depth analysis on market trends, supply and procurement opportunities in raw materials and intermediates, technology process, price updates, new policies and company dynamic, etc.

Following are headline news of the latest issue of Glyphsoate China Monthly Report:

Zhejiang Wynca to acquire 70% equity of Golden Sunshine Mining

Zhejiang Wynca's wholly-owned subsidiary——Wynca Hong Kong is trying to acquire the additional 70% share Golden Sunshine Mining in Ghana at USD6 million, indicating that Zhejiang Wynca is preparing to set foot into mining industry.

Nantong Jiangshan to acquire 90% equity of Ladda Group

Nantong Jiangshan is trying to acquire 90% equity of Ladda Group in Thailand at USD33.6 million, but it will be a very difficult thing because of Nantong Jiangshan's tight fund chain.

Anhui Huaxing divests real estate business

Anhui Huaxing transfers its last 51% equity of Anhui Huaxing Construction Investment and its total creditors' right of about USD8.45 million to Guoneng Business, and Anhui Huaxing will receive about USD21.73 million after the deal.

Chongqing Sanxia sells Sanxia Yingli

Chongqing Sanxia transfers its 100% equity and creditor right of Chongqing Sanxia Yingli to Chongqing Medical Purple Eagle at USD22.47 million, but Sanxia Yingli can't achieve great improvement in glycine business though its controlling shareholder will change after the deal.

Australia resumes anti-dumping investigation on China's formulated glyphosate

Australia Customs and Border Protection Service resumes anti-dumping investigation on China's formulated glyphosate products, which doesn't evoke great market responses in China.

Organophosphate Pesticides Industrial Pollutants Discharge Standard may hard to release in 2013

Organophosphate Pesticides Industrial Pollutants Discharge Standard may be hard to be released in 2013 attributed to its low acceptance and recognition.

Overview of China's public patent application related to glyphosate waste treatment in 2012

As of 12 Dec., 2012, China's State Intellectual Property Office has released 17 public patent applications related to glyphosate wastewater treatment, and half of the 17 applications are about the removal technology of phosphorus and nitrogen in glyphosate wastewater, and the other half is about the recycling technique of by-products in glyphosate wastewater.

Glyphosate price decreases slightly in Dec. 2012

Glyphosate price decreases slightly in Dec. 2012.

Overview of China's glyphosate price in 2012

In 2012, the average prices of glyphosate technical, glyphosate formulations and PMIDA all have achieved great improvement, which are the highest ones since 2010, especially glyphosate technical whose average price in 2012 increases by about 25.21% YoY.

Glyphosate technical price increases by 6.98% MoM in Oct. 2012

Glyphosate technical price increases by 6.98% MoM in Oct. 2012. 

About CCM

As a leading market research consulting company in China with more than 10-year-experience, CCM International offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.cnchemicals.com.

Contact

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Performance overview of listed seed enterprises in Q1-Q3 2012

The performance differentiation of listed seed companies in China in the first three quarters is basically the same with that in H1 this year, since Q3 is usually the off-season for corn and rice seed sales at home. Seed players with reasonable business structure and sensible operating strategies could generate increasing profits while those with poor status generally witnessed declined performance，according to CCM’s October Issue of Seed China News.

In aspect of net profit, Longping High-tech and Winall Hi-tech achieved sharp growth in the first three quarters this year mainly due to their efforts in seed business expansion. On the contrary, Hefei Fengle and Shandong Denghai suffered a remarkable decline in net profit; Gansu Dunhuang continued to suffer loss in Q3 2012, mainly due to its sluggish cotton and food processing businesses.

It seems that the enhancing and expanding seed business has brought good returns for seed companies like Longping High-tech and Winall Hi-tech, while some players like Hefei Fengle and Gansu Dunhuang have been implicated by non-core businesses with a high proportion in company's total revenue.

Some listed seed companies have started the distribution of seeds earlier for the marketing year of 2012/2013. For example, Shandong Denghai and Hefei Fengle have received increasing advance from customers in Q3 2012, which would be conducive to their performance rebound in 2012.

Shandong Denghai started the corn seed distribution in Sept., with more promotions for its distributors. Thanks to the good performance in field planting, "Denghai 605", a leading corn hybrid bred by Shandong Denghai, has seen a price increase of seeds, probably to create handsome profits for the company. However, the annual performance of Shandong Denghai would be not so optimistic in 2012, mainly in view of the declining profits of "Xianyu 335" promoted by its joint venture with Pioneer Hi-Bred International Inc.

The performance differentiation of listed seed companies in China would be extended throughout the year of 2012. The serious loss of Gansu Dunhuang is almost impossible to be reversed in the remaining period of 2012. Mainly due to depressed non-core businesses, Hefei Fengle would probably continue to generate a decreasing net profit in 2012, following the similar situation in 2011. On the contrary, Longping High-tech and Winall Hi-tech which have been strengthening their core business, would see continuous profit growth in the coming few years.

Source: Seed China News 1210

http://www.cnchemicals.com/Newsletter/NewsletterDetail_28.html

Content of Seed China News 1210:

Non-transgenic soybean price running high in Heilongjiang

"Zhongdan 909" suffered stalk breaking for strong wind in Hebei

Performance overview of listed seed enterprises in Q1-Q3 2012

ZARD to control HPSG

Longping High-tech to divest inferior businesses and enhance seed business

TYLCV occurrence in Northeast China

Foreign varieties dominate sweet pepper seed market in Shandong

SNP technology to reinforce seed testing

Interview to Ma Dehua on "Derit 10" cucumber variety

Major corn varieties promoted in Jilin

For more information about CCM’s Seed China News, please contact us at econtact@cnchemicals.com.

Global Sweeteners Acquires Equity Enterests in HFCS from Cargill

On 30 March 2012, Global Sweeteners Holdings Limited (Global Sweeteners) announced that it has signed a sale and purchase agreement with Cargill, Incorporated (Cargill) to acquire 50% equity interest in Global Bio-chem-Cargill (Holdings) Limited (Global Bio-chem-Cargill, a subsidiary of Cargill) and 10% equity interest in GBT- Cargill High Fructose (Shanghai) Co., Ltd. (GBT- Cargill) from the latter, with a total investment of USD4.2 million. In fact, GBT- Cargill was established in 2001 as a joint venture of Global Sweeteners and Cargill and it is engaged in producing F42. Upon the completion of the acquisition, these two companies will both become wholly-owned subsidiaries of Global Sweeteners, which will help Global Sweeteners to strengthen its operational efficiency and develop its high fructose corn syrup (HFCS) business, according to CCM’s May issue of Sweeteners China News.

The following reasons are mainly responsible for Global Sweeteners’ acquisition. Firstly, it’s the increasing market demand for HFCS that drives the company to acquire equity interests in HFCS companies. HFCS has been widely used in the food and beverage industry. Especially because of the surge of sucrose price in China since 2011, many food and beverage companies have switched to other sweetening ingredients and HFCS is considered to be a good substitute for sucrose. HFCS tastes better than sucrose and its sweeteness will increase with the drop of temperature. Besides, it costs less than sucrose does as a food additive. Therefore, the strong demand for HFCS drives Global Sweeteners' acquisition. In fact, to meet the huge demand from China’s food and beverage sector for sweetener products, except its previously existing F42 (F42 and F55 are two main kinds of HFCS) production facility in Shanghai, the company had also constructed a new F55 production line with capacity of 100,000t/a in the same production site and the construction was completed in Oct. 2011, and thus Global Sweeteners’ capacity of HFCS was up to 220,000t/a.

 

Secondly, Global Sweeteners acquires HFCS companies in order to improve its product structure. In view of Global Sweeteners, the HFCS joint venture with Cargill was a success and had helped Global Sweeteners and Cargill to pioneer in China’s HFCS market. However, F42 business of Global Sweeteners didn’t perform well, and its gross profit fell from USD2.5 million in 2010 to USD 1.4 million in 2011. Besides, F55 is used more and more widely and many users are switching to F55. In consideration of this, Global Sweeteners revealed that it is considering a range of options to revamp the existing F42 facilities, in order to either complement other production lines or to adjust its product structure.

 

Thirdly, the acquisition will increase Global Sweeteners’ cash level. According to the announcement, as of 29 March 2012, Global Bio-chem Cargill and GBT- Cargill have tangible assets of about USD4.4 million with no interest-bearing bank borrowing. The total cash balances in above two company amounted to about USD14.1 million while Global Bio-chem Cargill has dividend payable to Cargill which amounts to USD2.6 million. Thus directors of Global Sweeteners believe that the agreement will not only strengthen the management flexibility over the production planning, but also increase the company’s cash level.

According to Mr. Kong, the chairman of Global Sweeteners, the termination of the joint venture agreement will free the company to develop HFCS business according to its own strategies and at its own pace. Moreover, the sales and purchase agreement will enable the company to have full control over the F42 plant, which will allow it to better utilize the production facility and strengthen the operational efficiency upon the completion of the agreement.

Source: Sweeteners China News 1205

http://www.cnchemicals.com/Newsletter/NewsletterDetail_190.html

Content of Sweeteners China News 1205:

Output of Chinese food additives reaches 7.62 million tonnes in 2011

Nanning Sugar encounters net profit loss in Q1 2012

Annual National Conference of Sucrose 2012 held in Yunnan

Global sugar surplus to exceed 6 million tonnes

Food additive glycyrrhiza may withdraw from Chinese market

Shandong Longlive declares long-term development strategy

High concentration may promote China's sucralose industry in 2012

Saccharin facing possible elimination in China

Mogroside may become second most popular natural sweetener

Market overview of China’s HFCS till April 2012

Opinion solicitation for national standards of three sugar alcohols ongoing

Cyclamate industry impervious to food safety incidents

Sorbitol expansion of Tongchuang Biotechnology to complete in H2 2012

Crystalline fructose to be Xiwang Sugar's key development focus

Global Sweeteners acquires equity interests in HFCS from Cargill

… …

If you are interested in CCM International’s March issue of Sweeteners China News, please do not hesitate to contact us by +86-20-37616606, or email us at econtact@cnchemicals.com.

(Guangzhou China, May 7, 2012)

Sweeteners China News is a monthly newsletter published by CCM International Limited. Based on China market, CCM offers timely update and close follow up of China’s various kind of sweeteners market dynamics, analyze the market data and trends, Major columns include market dynamic, company dynamic, raw material supply, price update, import & export analysis, Consumption Trend & Competitiveness.

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Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1065.html