Long-term contract workers of multinational companies in China's pesticide companies

Most of the domestic pesticide companies with good operating conditions rely on working for transnational pesticide companies to provide cheaper drugs. The transnational pesticide companies earned extra profits globally after the second deep processing. The picture shows the production workshop of a domestic pesticide company that relies on exporting more than 80% of its sales revenue. (Reporter Zhang Yushe)

Sinochem New Network News Recently, the China Pesticide Industry Association organized the selection of the top 100 Chinese pesticide sales in 2010 list officially released. Zhejiang Xin'an Chemical Group Co., Ltd. topped the list with 1.873 billion yuan in pesticide sales. Jiangsu Yangnong Chemical Co., Ltd. and Zhejiang Jinfanda Biochemical Co., Ltd. ranked second and third respectively. The sales of pesticides in 2010 were 1.496 billion yuan and 1.455 billion yuan respectively. Standing on the top 100 starting line is Shaanxi Shangge Road Biosciences Co., Ltd., which has sales of 170 million yuan.

It stands to reason that the person in charge of the top 100 companies selected for pesticides should be very encouraged, but CCIN reporters found that at the scene, the person in charge of the company looked full of thoughts. After getting an interview with the CCIN reporter, it was learned that the person in charge of the top 100 companies generally had three major distresses in their hearts.


"We are long-term contractors for foreign companies."


CCIN's press conference learned that such a figure: multinational pesticide company Syngenta Group's 2010 sales revenue of pesticides 8.841 billion US dollars, while the total sales revenue of domestic top 100 pesticide companies was only 49.97 billion yuan, about 7.765 billion US dollars. In other words, the annual sales revenue of the top 100 companies is not even more than the sales revenue of a major international company.

Top 100 companies Jiangsu good harvest Wayne Agrochemical Co., Ltd. Chairman Jiang Lian told CCIN reporters that China's pesticide dependence on foreign trade in more than 50%, the export volume in the past three years between 1 million to 122 million tons. The current status of exports is: large quantities, low prices, and positioning in the low-end market. After the export, foreign large companies perform secondary intensive processing to produce high-end products that we can't make and earn excess profits globally. This is one of the major reasons why China's pesticide industry is big and not strong. In 2010, China's pesticide output was 2.342 million tons, and its export volume was 1,126,300 tons. From January to August this year, the pesticide output was about 1.5 million tons, domestic consumption was about 30%, and 70% of the amount was seeking export.

"China's pesticide companies have done a better job. At present, they are only working for foreign companies." Prof. Zhang Yibin, a consultant of the Shanghai Pesticide Research Institute, stated that China's pesticide companies are in a position of rivers and lakes.

A person in charge of a top 100 company that did not wish to be named revealed that most of the top 100 Chinese pesticide sales companies have close cooperation with foreign companies. Rely on low prices and maintain a stable supply relationship with foreign companies to ensure sales. For example, Bayer's domestic suppliers include Zhejiang Xin'an Chemical Group Co., Ltd., Hubei Sanonda Co., Ltd., Jiangsu Changqing Agrochemical Co., Ltd., Suzhou Fumei Real Plant Protection Agent Co., Ltd. and many other top 100 companies. Another example is Australia's Xinnong Company, Zhejiang Xin'an Chemicals, Shanghai Hujiang Biochemical Co., Ltd. and other top 100 companies have long-term production agreements for glyphosate, but the company also has long-term orders for 20 years with Monsanto. Glyphosate was sold to Monsanto. Another example of Syngenta and BASF's domestic suppliers are Jiangsu Yangnong Chemical Co., Ltd., Nantong Jiangshan Pesticide Chemical Co., Ltd., and Jiangsu Huifeng Agrochemical Co., Ltd. Also like Dow's supplier, Seoul Chemical Co., Ltd. and so on.

A person in charge of a top 100 pesticide company in Shandong told CCIN that some of the company's pesticide products were 100% underwritten by Israel's Maxim Agan, because the production technology was provided by it. According to the signed agreement, the products can only be supplied to Maxim Agan. Unless it is a batch of products that do not meet Maxim Agan’s high standards of quality, they will be sold in the domestic market.

The person in charge said that Bayer, Syngenta, Dow, BASF, Monsanto, and DuPont, which are multinational pesticide companies, accounted for more than 80% of the global pesticide market, and only Syngenta has more than 50 in China. Pesticide supplier. Under the background of economic globalization, transnational pesticide companies have mastered scientific research and development and sales, and have shifted production links to China. We are the long-term contract workers of these multinational companies.

“Domestic companies provide the best quality products and earn a meager fee.” The above-mentioned person in charge reluctantly pointed out that the prices of raw materials soared in the first half of the year, environmental protection costs and labor costs are also rising, but the domestic original drugs Prices have not risen much, and some varieties have even declined. The price of imported pesticides rose from US$8,214/ton in the same period of last year to US$9354.8/ton, up by US$1,140.8, up 13.9% year-on-year. The increase in the export price of pesticides in China is only about 5%. Taking into account the factors of the appreciation of ***, the actual increase is very low, far less than the increase in cost, so the profits of the original drug companies are extremely meager.

Even earning such a meager contract fee will not last long. Tom Gehry, global head of procurement at Syngenta, recently stated that India’s pesticide competitiveness has surpassed China’s in some respects with the rapid rise in costs such as China’s employment costs. It can be seen that the cooperation between transnational pesticide companies and Indian pesticide companies may become more and more close in the future.


"It is not easy to survive. What about product creation?"


“At present, there are more than 260 pesticides produced in China, and only 20 varieties with independent intellectual property rights. Most of the pesticides are imitation products, use foreign expired patents or unprotected patents.” Zhang Yibin said that non-production Patented products are also OK, but the practice of domestic companies likes to follow suit. Seeing a variety is good, everyone swarms until the product is crippled. Taking glyphosate, the current domestic demand for glyphosate is about 50,000 tons, and the total production capacity has reached 850,000 tons. Multinational companies control most sales terminals, and none of the domestic companies have pricing rights.

When CCIN reporters interviewed the heads of top 100 companies, many CEOs of companies have realized that imitation is not feasible, but innovation is not enough.

“For many domestic pesticide companies, R&D is easier said than done.” A top 100 company told CCIN reporters that the creation of new pesticides basically belongs to the basic research field, the initial investment is very large, the cycle is very long, and there are more If you do not have strong financial strength and technical strength to support large-scale risks, the creation work will be unsustainable. International large companies have continued the development path of “patented pesticides—great profit—investment in R&D—new patented pesticides”, and annual R&D investment accounts for 10% of their sales. However, in China, this development route simply does not work. Since the reform and opening up, the country has called on companies to create systems, but today, basically what it is like for decades now. China is rich, but it is in the hands of the government. You think about it, the company has been tossing over the past few decades and the living environment has not improved. So far, the average profit margin of the pesticide industry is less than 6%. Some well-established big companies invest only 1% of their sales. The amount of funds invested by China's pesticide companies for each type of product creation is less than 5% of that in developed countries. Moreover, most of the pesticide industry is a private enterprise, and many aspects of the banking industry are discriminated against. "It is not easy to survive. What about product innovation?"

In addition to insufficient funds, enterprises are also lacking in technology and talent. Li Zhonghua, vice president of the Sinochem Chemical Science and Technology Research Institute, pointed out that the research and development of pesticides is made up of many disciplines such as chemistry, chemical engineering, biology, botany, medicine, and law (patent protection), and it requires the concerted efforts of all parties. Due to the fragmentation of the planned economy in the past, the basic research of the enterprise was weak, and the technical reserves and talent reserves were not abundant.

"Don't say that companies have difficulties in getting creative, even research institutes are still struggling." Zhang Yibin told CCIN reporters that during the "Ninth Five-Year Plan" period, the country selected a number of well-established chemical and pesticide scientific research units to support the country's behavior. Established two pesticide science and technology innovation platforms, namely: establishing national pesticide engineering centers in Shenyang Chemical Research Institute and Nankai University; establishing pesticides in the south at the Shanghai Institute of Pesticides, Jiangsu Province Pesticide Research Institute, Zhejiang Chemical Research Institute, and Hunan Chemical Research Institute. Creation center.

"The R&D hardware has been available, but the software is not enough. The annual cost spent by the state to maintain R&D is too low." Zhang Yibin said that taking the Southern Pesticide Creation Center, during the Ninth Five-Year Plan period, the state invested a total of 200 million yuan in the south. The foundation of the four major bases for the pesticide creation center. In the "10th Five-Year Plan" and "Eleventh Five-Year Plan" period, the state funding has been reduced by half, and each has invested about 100 million yuan in support. The creation of a new pesticide species by international pesticide companies takes about 10 years and invests 100 million to 200 million U.S. dollars. Under the constraints of limited investment and other issues in our country, the speed of pesticide creation is naturally unsatisfactory. After the Institute was transformed, the speed of creation was even slower. Research institutes must be responsible for their own profits and losses. Researchers are struggling to earn wages. Research and development will inevitably lead to quick success. It is hoped that the research topics will become as simple as possible and the effective as soon as possible.

Li Zhonghua also revealed that the state's emphasis on the creation of pesticides is not enough. In 2010, 17 leading pesticide companies and key research units jointly established a strategic alliance for technological innovation in the pesticide industry. The "12th Five-Year Plan" green pesticide innovation project submitted by the coalition to the country is currently approved, and the country will allocate 200 million yuan for this project during the "12th Five-Year Plan" period. That is to say, the average annual investment of 50 million yuan in the "Twelfth Five-Year Plan" period should cover the whole process of new product development, namely, the synthesis and screening of new compounds, the adjustment of production process, and the disposal of wastes. And the capital is still 17 companies. Compared with the investment of 100 million to 200 million U.S. dollars in the development of a new laboratory by a large foreign company, the investment in China is still too small.

Zhou Shuguang, deputy general manager of Zhejiang Xin'an Chemical Industry Group Co., Ltd.'s agrochemical division, pointed out that the environment for intellectual property protection in the country for many years was not good. The glyphosate ammonium salt soluble particles and glyphosate potassium salt raw powder developed by the company a few years ago were copied by many companies in the market within two years. In such an environment, the competitiveness of enterprises is greatly reduced, and the enthusiasm of R&D is also dampened.


"Domestic farmers are abandoning domestic pesticides"


What makes the top 100 companies even more worried is that the concept of pesticide application in domestic farmers has also changed. In recent years, the demand for efficient, low-toxic, pollution-free new varieties of pesticides imported by farmers has increased. Monsanto's Farma, Bayer's Ruijinte, DuPont's Kang Kuan, Syngenta's comfortable music, and Dow's efficient agriculture have become familiar names for hundreds of millions of farmers and pesticide industry personnel in China.

“Domestic farmers are abandoning domestic pesticides!” A person in charge of a top 100 company in Shandong told CCIN reporters that farmers are now unlike what they used to be. Which products were previously cheaper to buy? They now become more focused on the safety, efficiency, and toxicity of pesticides. As a result, even if the market prices of imported pesticides such as Syngenta's Fogo and Bayer's take the enemy are much higher than those of low-end and domestic pesticides, farmers still have a preference. Pesticide prices are not the only factor that grain growers consider. Importing high-end pesticides is the first choice. "For example, six or seven years ago, the company organized an annual local technical supervision department to crack down on counterfeit goods. Now that there are fewer fakes, the concept of farmers has changed. The company's salesman found on the market that two bottles of the same specifications and the same The effective content of domestic pesticides and imported pesticides are put together, and the price of imported pesticides is higher than that of domestic ones. Farmers would rather spend more money and buy imported pesticides."

Another person in charge of one of the top 100 companies said that through the investigation of pesticides in the first half of the year, the company found that farmers generally welcomed imported pesticides. Safety, environmental protection and long-term control are the most prominent advantages of imported pesticides. The control effect of imported pesticides such as Fogos is about 20 days, while the control time of domestic pesticides of the same type is generally only 3 to 5 days, but not more than 7 days. Farmers use Foggo's cost of 22 yuan per mu, planting rice for just one season. The use of domestic pesticides costs 10 yuan per mu, if the medication is used 4 times, the cost of medication is also about 40 yuan. In rice heading, it is not easy for farmers to fight once. Therefore, imported pesticides that can reduce the number of medications are naturally favored by farmers. Although the price of imported pesticides is generally twice as expensive as that of domestic pesticides, at the moment of higher prices of agricultural products, the large grain producers are not very sensitive to the price of pesticides, and the use of imported pesticides reduces the number of times they fight drugs. Labor cost. With the general lack of rural labor force, imported pesticides are favored due to labor saving.

Wu Longhua, chairman of Hangzhou Yulong Chemical Co., Ltd., told CCIN reporters that the share of foreign pesticides accounted for about 30% of the pest control of rice. In the control of rice and wheat weeds, foreign pesticides have taken the lead. For example, the first drug used to control rice planthoppers is Bayer's Elmer, followed by domestically produced pymetrozine and buprofezin. The agents used to control rice stem borer and rice leaffolder were first used by DuPont's Kang Kuan, Bayer's Rice Teng and Syngenta's Fogo, and domestic similar products such as chlorpyrifos, triazophos, monosultap, and acetylcholine. *, Daofeng scattered, etc. suffered a great impact. In the rice field herbicide market, the herbicide-controlling agents are basically monopolized by imported varieties. They are Han Qiuhao of FMC Corporation in the US, and Dow Corning, DaoJi, Daoxi Herbicides of the Dow AgroScience, and Japanese combinatorial chemistry. Li will be able to wait. Among the pharmaceutical agents for controlling rice blast, Syngenta's Schorck sold more. Among the fungicides, Syngenta's Aimiao, Dow Agro's Dasheng and Bayer's Silver Ferry all saw market sales increase by more than 20% in the first half of this year. Narada of Monsanto firmly occupies the Chinese herbicide market.

Compared to a single Chinese and foreign pesticide companies' performance, China's pesticide companies are even more frustrated. According to the semi-annual report of 18 listed companies of pesticides, 6 companies suffered a loss in performance, and 5 companies saw a year-on-year decline in profits. Zhejiang Xin'an Chemical Company, Nantong Jiangshan Pesticide Chemical Company, and Anhui Huaxing Chemical Company ranked among the top 15 companies in the Top 100. According to the first-half performance report published by Syngenta, sales of $7.7 billion, an increase of 14%; net profit of $1.4 billion, an increase of 14%. The Dow Chemical Health and Agricultural Technology business segment generated sales of more than $3 billion in the first half of the year, setting another record high. In the first half of the year, BASF’s business growth was also strong, with sales up 19.4% year-on-year. The reports of these multinational companies all emphasized that the strong growth in sales volume in the Chinese market is one of the main reasons for the company’s sales growth.

Transnational pesticide companies are very much focused on product use guidance. The photo shows the “Foreign Experts” of the Syngenta Group, the world’s largest agrochemical company, providing guidance to a Zhuang farmers in Guangxi in the field (photographed by Wang Zhaoyong, reporter from the newspaper)