On Aug 28, 2019, Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. (Nantong Jiangshan) issued a supplementary announcement on acquisition of 67% stake equity of Heilongjiang Harbin Linmin Agricultural Technology Co., Ltd. (Harbin Linmin). According to the announcement, the company plans to acquire a 67% stake of downstream client Harbin Linmin, namely Honourich International Investment Ltd, with a total payment of USD30.2 million (RMB214.0 million).
The acquisition will enrich the formulation product portfolio, which will expand sales capacity and market size of the company, and drive a long-term growth and profitability, according to Nantong Jiangshan.
In fact, Nantong Jiangshan signed letter of intent to acquire Harbin Linmi on Dec 17, 2018. According to the information, the two companies have been working together for many years before the acquisition. Harbin Limin purchases herbicides from Nantong Jiangshan every year, such as acetochlor TC, butachlor TC and glyphosate TC.
According to the financial statement, total assets of Harbin Limin were USD34.1 million (RMB242.0 million) by the end of 2018. The revenue of the company reached USD28.5 million (RMB202 million) in 2018, with net profit of USD4.9 million (RMB34.9 million).
Northeast China, a main crops producing region of soybean, corn and rice, is one of the priority development areas of Nantong Jiangshan pesticide formulations due to its broad prospects in pesticide market.
Harbin Limin is one of the influential pesticide formulation production and marketing enterprises in northeast China. With its loyal customer base and good brand reputation over the years, Harbin Limin maintained stable operating performance and that’s the main reason for Nantong Jiangshan to acquire the stakes.
Following the completion of the acquisition, the company can be enriched the product portfolio, the company will be closer to the end market of Northeast China and then reduce logistics costs, according to Nantong Jiangshan.
It is worth mentioning that Nantong Jiangshan will set out to evaluate the acquisition of remaining 33% stake in Jan 2022, the delivery and payment are expected to complete before 30 June, 2022.
“We will continue to focus on the main business, at same time, increase R&D spending to develop the competitive and profitable products,” Nantong Jiangshan said, “we will strive to environment control and build a resource saving and environment friendly business.
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