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China Daily Website

Chinese pesticide firms aim to grow US market share

Updated: 2013-08-16 00:07
By CAROLINE BERG ( China Daily)

In the world of the "Big Six" agriculture-chemical companies, marketing a product is like trying to find shelf space in the cereal aisle dominated by a handful of brand names, but that's what Chinese pesticide producers are looking to do.

Dow Chemical Co, Syngenta AG, Monsanto Co, Bayer AG, BASF SE and E.I. Du Pont De Nemours and Co are producing the majority of their agriculture-chemical products in China, according to Telisport Putsavage, a pesticide industry expert and environmental counsel at Sullivan & Worcester law firm in Washington.

Chinese pesticide firms aim to grow US market share

The Chinese government expects to see an increased effort by domestic agriculture-chemical companies to sell their own brands in the United States, which would increase China's market share in the global industry.Provided to China Daily

At the same time, the Chinese government expects to see an increased effort by domestic agriculture-chemical companies to sell their own brands in the United States, which would increase China's market share in the global industry.

"One of the difficulties for any company, particularly offshore companies looking to enter the US, is figuring out a way to break into distribution," Putsavage said.

"These products do not go to the farmers and they don't even go directly into farm retail stores. They all go through distributors."

In 2011, China's largest generic agricultural-chemical company, China National Chemical Corp (ChemChina), with nearly $32 billion in annual sales, put up $2.4 billion to acquire the world's largest generic agricultural-chemical producer, Israel-based Makhteshim Agan Industries Ltd.

The deal not only helped ChemChina expand its production capabilities. It also better positioned the company to break into the US pesticide market, Putsavage said.

Pesticide companies have played a key role in driving the growth of China's chemical production output, which overtook that of the US for the first time in 2010.

In 2012, China's chemical pesticide output increased 34 percent year-on-year to 3.6 million tons, according to the China Pesticide Industry Report, 2012-2015.

In 2012, the operating revenue of Chinese pesticide manufacturers increased 21 percent to $38.5 billion, while total profit reached about $2.9 billion.

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