Trusted Market and Commodities-Trade Intelligence


Think Real News


Think Real press releases and industry coverage

Jiangsu Yangnong to acquire pesticide business from Sinochem International

In August 2018, Jiangsu Yangnong Chemical Co., Ltd. (Jiangsu Yangnong) signed a Letter of Intent on the Share Transfer of Sinochem International Crop Care Company Limited (Sinochem Crop Care) and Shenyang Sinochem Agrochemical R&D Co., Ltd. (Sinochem Agrochemical R&D) with its affiliated party Sinochem International Corporation (Sinochem International). This is a move intended to accept 100% of shares in both Sinochem Crop Care and Sinochem Agrochemical R&D from Sinochem International in cash.


The transaction is a significant asset reorganization: the combined full-year 2017 revenue of the 2 target companies made up over 50% of Jiangsu Yangnong’s. It should be passed by the company’s board of directors and shareholders’ meeting, as well as the administration, after signing the letter of intent.


The acquisition is expected to have 2 positive impacts on Jiangsu Yangnong:


1.          To further expand the sales channel. Sinochem Crop Care is mainly involved in the imports and exports of goods and technologies, and the sales of agricultural means of production (business operation should be licensed). Its revenue was up to USD512.2 million in 2017 and USD284.0 million in H1 2018, and the corresponding net profit USD12.6 million and USD26.6 million.


2.          To strengthen R&D capability. Sinochem Agrochemical R&D grew out of Shenyang Research Institute of Chemical Industry, Pesticide Research Institute. It is a pesticide R&D institute based on a complete production system, from design and synthesis of new chemicals, development of new production technology, processing of pesticides to biological activity determination. It has developed production technologies for key pesticides such as glyphosate, butachlor, carbendazim, mancozeb and chlorpyrifos, which are widely adopted now.


According to Jiangsu Yangnong’s report, the pyrethroid price may maintain high. In the context that the environmental pressure is heavy and the companies are forced to relocate themselves from cities to industrial parks, the small- and mid-sized enterprises which are technologically backward will be phased out at higher speed and the pesticide demand & supply structure will be optimized in a continued way. Jiangsu Yangnong is advantaged by its integrated supply chain. Undoubtedly, the acquisition of Sinochem Crop Care and Sinochem Agrochemical R&D will greatly help improve its leading position in the pesticide market.