On Sept. 6, 2012, Chongqing
Huapont Pharmaceutical Co., Ltd. (Chongqing Huapont) acquired 58.26% shares of
Hangzhou Qingfeng Agro-chemical Co., Ltd. (Hangzhou Qingfeng). Hangzhou
Qingfeng is a company mainly engaged in amide herbicides. Through this
acquisition, Chongqing Huapont can enhance its herbicide production strength
with Hangzhou Qingfeng's resource production base, according to CCM’s October Issue
of Herbicides
China News.
In detail, Chongqing Huapont
purchased 58.26% shares of Hangzhou Qingfeng, a subsidiary of Hangzhou
Industrial Asset Management Investment Group Ltd. (Hangzhou Industrial) with
about USD9.17 million (RMB 58.08 million).
At present, Chongqing Huapont has
several main pesticide products—metamitron technical, oxyfluorfen technical,
bifenthrin technical and picloram technical. After the acquisition, Chongqing
Huapont can produce a series of amide herbicides including alachlor,
acetochlor, pretilachlor, butachlor, metolachlor, propisochlor and also can
produce prochloraz (a kind of fungicide), which are originally owned by
Hangzhou Qingfeng.
It's predicted that after the
acquisition of Hangzhou Qingfeng, Chongqing Huapont will integrate complementary
resources of Hebei Wanquan Kaidi Chemical Imp. & Exp. Co., Ltd. (Wanquan
Kaidi), Nutrichem Company Limited
(Nutrichem) and Hangzhou Qingfeng for sensible use of resources, which can
reduce the cost of sales sharply.
From 2011, Chongqing Huapont has
aggressively developed pesticide business by way of acquiring pesticide
companies. In detail, in July 2011, Chongqing Huapont acquired 100% shares of
Nutrichem; in May 2012 , the company acquired 31.24% shares of Wanquan Kaidi
whose main products are metamitron and clethodim; Also in this May, the company
acquired 49% shares of Hebei Wanquan Hongyu Chemical Co., Ltd. (Wanquan
Hongyu). (Herbicides News 1107: Huapont acquires Nutrichem; Herbicides News
1205: Huapont invests in Wanquan Hongyu and Wanquan Kaidi)
On Aug. 8, 2012, Chongqing
Huapont issued its H1 2012 semi-annual report. It shows a good performance of
Chongqing Huapont, especially in pesticide business. After Nutrichem was
acquired by Chongqing Huapont, Chongqing Huapont has been congruously
developing the businesses of pharmaceuticals and pesticides. And Nutrichem
pushed Chongqing Huapont's business forward in H1 2012.
In H1 2012, the total revenue of
Nutrichem was about USD220.7 million (RMB1.4 billion) with gross profit margin of
13.56%. As to the company's products, the revenue of metamitron technical and
oxyfluorfen technical were about USD20.9 million (RMB132.3 million) and USD11.0
million (RMB69.7 million) with gross profit margin of 28.41% and 11.65%
respectively.
Now, Chongqing Huapont further
develops its pesticide business by acquiring Hangzhou Qingfeng whose business
is in deficit. In an estimate, one of the reasons why Hangzhou Industrial sold
its shares in Hangzhou Qingfeng is that Hangzhou Qingfeng suffered a net profit
loss of about USD8.12 million (RMB51.43 million) in 2011. As of March 31, 2012,
the total assets of Hangzhou Qingfeng was about USD83.2 million (RMB554.5
million) and its net assets was about USD-21.3 million (RMB-134.9 million).
As indicated by Chongqing
Huapont, the deficit of Hangzhou Qingfeng is mainly due to the unwise operation
of its mother company, Hangzhou Industrial. After the acquisition, Chongqing
Huapont will enhance the management ability of Hangzhou Qingfeng and Hangzhou
Qingfeng will recover in 2013 in
an estimate.
As expressed by Chongqing
Huapont, in the acquisition, there are still some potential risks that the
company should pay attention to. According to the acquisition proposal, new
industrial park has higher requirements on environment protection, especially
on waste gas. Therefore, it wasn't sure that Hangzhou Qingfeng could
successfully relocate into new industrial park, as Chongqing Huapont estimated.
Although Hangzhou Qingfeng has a good foundation, Chongqing Huapont needs to
put more efforts to get rid of the malpractice in Hangzhou Qingfeng after the
acquisition.
At present, Hangzhou Qingfeng's
production base is in Hangzhou
Xiaoshan Linjiang Industrial Zone , Zhejiang
At any rate, under the direction
of Pesticide Industry Policy in China
Besides, at the end of 2011,
Chongqing Huapont purchased 7.5% shares of CCAB Agro S.A. (CCAB), a company who
is mainly engaged in pesticide business in Brazil Brazil
Content of Herbicides China
Chongqing
Huapont acquires Hangzhou Qingfeng
Jiangsu
Tenglong manufactures glyphosate in Inner Mongolia
Jiangsu
Agrochem Laboratory gains formal florasulam TC registration
CAC
Nantong prepares 2,000t/a thiobencarb and 300t/a cyhalofop-butyl production
lines
Three
coming off-patent herbicides in China
Mild
fluroxypyr market in China
Pendimethalin
heats in China
Anhui
Meiland to supply clodinafop-propargyl EW
Anhui
Zhongshan's 1,000t/a metamitron project proceeds
PMIDA
supply intense in Sept.
Clethodim
grows quietly in China
No
flumioxazin supply in China
APVMA
to finalize diuron review in Nov. 2012
Dicamba
price floats upward in Oct. 2012
Chongqing
Huapont Jiangsu Tenglong Jiangsu
Agrochem Laboratory CAC Nantong anti-dumping pyridine fluroxypyr Pendimethalin
clodinafop-propargyl metamitron PMIDA Clethodim
flumioxazin diuron Dicamba
Herbicides
China News, a monthly
publication issued by CCM on 15th of every
month, 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
About
CCM
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is dedicated to market research in China
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International Ltd.
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