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Historically, China's pesticide industry policies have been relatively loose, barriers to industry entry are low, and low-level redundant construction and overcapacity are serious. The sales of 8 major pesticide multinational companies in the world accounted for about 80% of the global sales of pesticides, while nearly 2,000 pesticide production companies in China, even if the listed company’s largest sales revenue of pesticide products accounted for only about 3% of national sales revenue. The industry concentration is very low. This leads to disorderly competition in the domestic pesticide market and directly affects the economic benefits of the company. The poor economic strength of a single pesticide company has led to low investment in R&D of new drugs, and the entire industry has always been in a vicious cycle of product homogeneity and price competition.
From the perspective of the development of the international pesticide industry, the profits of the industry are shifting from the manufacture of original drugs to finished products and sales channels. Similarly, with 1 ton of glyphosate herbicide, domestic enterprises can only obtain less than 30,000 yuan in sales revenue in the form of original drugs. And a few thousand dollars of gross profit. This led to China's pesticide production, although accounting for a quarter of the world, but sales are less than one-tenth of the global market. However, at the same time, the international shift in the production of pesticides of common varieties towards low production costs and environmental protection costs has become a trend. If domestic domestic pesticide manufacturers can gain a large market share in this round of international industrial transfer, their scale strength and profitability are expected to be within a short period of time. Get a quick boost.
Under the guidance of a series of policies such as the National New Rural Strategy, the pesticide industry in China will face good opportunities for development in the next five years, but a good external environment will only provide a possibility. The leading factor in the new life of the pesticide industry lies in the industries and enterprises. Internal transformation. In addition, since January 1, 2007, five highly toxic organophosphorus pesticides such as methamidophos, methyl parathion, parathion, monocrotophos, and phosphine have been banned in China. The use of these five pesticides and preparations accounts for about 25% of the total use of pesticides. The withdrawal of such varieties will leave a great alternative space for new low-toxicity and environmental pesticides, and expand production for some powerful companies in the short term. Scale and market share provide historic development opportunities.
Since 2003, as international crude oil prices have continued to rise and domestic energy prices have risen, the prices of organic intermediates, yellow phosphorus, liquid chlorine, and methanol have risen significantly, and the production costs of pesticide companies have continued to rise. However, since the first quarter of 2005, the price of chemical raw materials fell back from a high level. At the same time, the price of pesticides rose due to cost, and the profitability of the domestic pesticide industry began to rebound.