Aggressive pesticide market situation

China Pesticide Network　 2014/12/12 10:48:35 　 Source: Farmer’s Daily　 

 “wrangle E-business trend, Plan for growth strategy,seek cooperative development”,6th-7th.Dec,2014”growth strategy”china pesticide preparations enterprises BBS held in bejing.Ten responsible persons from pesticide enterprises Shared their development strategy and tips corresponding on how to reach the company new growth under current situation.Meanwhile they had a hot debate around “Whether the E-business will become mainstream marketing model in Agricultural materials industry,inspire industry common thinking,and explore the next development road.

　　to growth without a good product:

I recent years,china pesticide market develop rapidly, Multinational companies in the domestic market share continues to increase, The market share has been more than a third.　Syngenta has more than one billion us dollars selling amount on fungicide, It accounts for one 8 of the domestic market of fungicide by only one company. China pesticide industry association, director of the ministry of information,Mr Duanyousheng pointed that, As a leading pesticide production country , we still in the most low-end of the agrochemical smile curve,has a big gap with multinational companies. Domestic enterprises need to strengthen the research and development and channel construction, To speed up mergers and reorganization,pay more attention to the service, Promote the industry healthy and rapid development.　 

　　The situation is pressing, Not to advance is to go back.On this background, Good domestic preparation enterprises also actively pursuing new and changes,palnning development.How to reach the new groeth,theanswer is not same among these companies,But all are emphasizing the importance of product&service.

　　Operation cost increasing right now,difficult to keep growth constantly,It’s also force these companies to take the profits to Keep on research and development,strengthen the service. Deputy general manager  of Shaanxi agriculture heart investment holding co., LTD., Mr Liu jian said, Quality is fundamental to all support, We continuously strengthen the quality on products on improvement and stability of ascension, In terms of crop solutions, Because the crops vary widely, Climate, variety, difference is very big, We want to increase the application technology research and development, To further meet user needs.

  Growth is a hard truth, enterprise will be more and more difficult without growth.

The companies can not keep growth without a good products,no good products,it’s just empty talk.General manager of Beijing YanHua yongle biotechnology co., LTD,Mr Tangyindong said, Product development is not overnight thing,Yanle Yonghua just push the product development into the most important strategy,will hold more than 4 times product project meeting, continuously promoting,　 This is also the reason why our company has new product to promote in the market and meet the market demands every year.　 

　　The president of Jilin bada pesticide co., LTD,Mr Songyongji said,there is a big gad between domestic enterprises&multinational companies,such as seed coating,there are just several kinds of product promoted by abroad companies,but there are a lot of registration of this product by domestic companies,if you can ensure of quality,the selling amount will growing stable.Our domestic companies must make full preparations,go the way of safty,quality&brand

   The future development of 123 strategy is put forward by Dragon Lantern,it’s that built a brand,promote the ability of quality,technical&service.Vice president of Dragon lantern crop science and technology co., LTD&general manger of china,Mr Liuxuejun said, Dragon lantern will do their research and development of promotion,seed coating development will be as a top priority.Focus on single product,also focus on crop, According to the crop to build Purposeful  solutions, make good use of existing resources,keep leading superiority in technology service.

In order to win in the everlasting changes, different companies have their own strategies to expand their market shares.

Those participating companies employ different strategies to do the market expansion facing the fierce competition in the market. 

The sales turnover of the individual product Yanhuasaofei launched by Beijing Yanhuayongle has exceeded one hundred million RMB, which is quite remarkable. This makes Beijing Yanhuayongle become a star of the industry. One of its insecticides has become the first domestic product which has been included in the list of products for rice by bayer cropscience. “Serve well the key customers and focus on the crucial products has been our strategy for last few years”, said by the general manager of the company,” the sales of formulations for rice has covered up 60% of the total, there is quite a big imbalance in the development of different areas.Besides, the market for products for wheat,corn,fruits and vegetables has developed quite fast in last few years, so we are going to appropriately expand our markets in those new important crops.” 

"In consideration of the condition that the current market is relatively saturated and the supply is more than the demand, just thinking about the size growth is a very difficult thing." Gao Xiang Wen, Chairman of Jinan Shibang Agrochemical Co., Ltd. said,” and  enterprises should pursue growth in the brand competitiveness and the ability to adapt to new trends. The profit is more important than size. We have no plan to purse the size growth in the future, rather we will focus on the adjustment of the the optimization of the product structure, market distribution and etc.

On the revolution of marketing channels, Shaan’xi norsyn investment holdings Co,.Ltd has tried to say no to credit habits. Mr.Liujian, the deputy manager of the company told the journalist that most of the formulators sell their products upon credit terms, however, we have initiated the reform from last year by providing products to Henan Province on cash delivery, after one year of operation, we are going to expand to another two provinces. In addition, the rate of the return of the payment will be increased to 70% from original 40%~50%.Thus the cash flow of the company will be healthy and guaranteed.

"Currently the market of insecticides, fungicides and herbicides will get fully saturated soon, only plant growth regulators will still have room of growth." Says Yan Yaqi , general manager of Sichuan Guoguang Agrochemical Co., Ltd..He also indicates that there are  more and more big companies and they have paid more attention to enhance crop quality and yield and the possibility to increase the value. Our next step is to integrateplant growth regulators, insecticides and fungicides and provide them to users. We have introduced a number of supporting programs in western Sichuan in cooperation with Syngenta. It will be very difficult for an individual enterprise, cooperation between companies will be a good direction to do so. Also we are going to establish a formulation processing center in the west in order to formulate for other companies there aiming to reduce logistics costs.

Large potentiality for Cross-border integration of social service

Currently, comprehensive prevention and control system, professional social service hasbecome a major trend, many pesticide companies has spotted the situation and actively transformed themselves from product suppliers to the professional social service providers.At the same time, they have entered other fields such as fertilizers, seeds, agricultural machinery and etc in order to achieve cross-border integration of resources.

Sino-agri leading biosciences Co,.Ltd has taken measures very often in terms of resources and channel construction. Zhang xiaojun,director of research and development center of the company says that his company has acquired Beijing FengMao Plant Protection Machinery Co., Ltd. this year and also joined hands with big channel dealers in Guangdong province. Meanwhile it has actively shifted to be a professional service provider and so far has established 5 pilot projects in Shandong, Henan, Hubei and etc to explore the establishment of social service system. In Inner Mongolia, northeast and Through cooperation with Sichuan Guoguang,Sino-agri has integrated channel products to provide professional pest protection to 2 million acres of corn in inner Mongolia and north east China, next year it will expand to 10milllion acres. In addition, also in Shouguang,Shangdong Province, it has made experiments in order to carry out the safety traceability management of Vegetable Production, from planting, spraying, management, harvesting to enter the supermarket, full implementation of the two-dimensional code management.

In view of rural labor shortages, increasing labor costs, Guangxi Tianyuan Bio-chemical Co..Ltd began to explore the field of high-efficiency plant protection services from 2009 and set the combination of pesticides, fertilizers, seeds, Medical Devices as an important development strategy in the future. Market Director of the company-Wenzheng Hong said to reporters we have launched a pilot project in Anhui that we build platform support to transform the existing traditional channel distributors into agricultural service providers, offering service to those big customers from the nursery, planting, fertilizing to control by plane. “The current pesticide and fertilizer sales have reached 120 million yuan, it was also a major area of growth brought this year and last year. In addition, the combination of drug and device will be company's next major development priorities, Guangxi Tianyuan Bio-chemical Co..Ltd registered the formulation of LV and ULV which can save water usage, we have had 100,000 Mu(about 16667 acres) controlled by plane this year.

Coincidentally, Jiangxi ZhengBang Bio-chemical Co., Ltd has set up two subsidiaries recently,  one is a comprehensive agricultural chain service brand, which integrates aircraft, machine, harvesting, pesticide and other businesses etc. Another is only for control by plane. "Marketing director of the company-Yinhua Yuan said we hope very much to seek cooperation with leading firms in industry on plane, product and technology to achieve a mutual benefit. 

E-commerce is developing very fast and we have to make an early layout to seize the super opportunity.

At the moment, e-commerce has become a hot topic of much concern in the industry, regarding to the theme whether e-commerce will be a mainstream marketing mode in the agricultural industry within 5 years, 10 enterprise executives held a special and fresh debate where collision of views and confrontation of wisdom also led to more thought for e-commerce in the industry.

For the above debate, some people who support the view think more and more fast land transfer, more and more big growers, specialized cooperatives and the popularity of mobile internet will totally create a condition for developing agricultural e-commerce. Users of e-commerce are mainly big growers, cooperatives and distributors but not all farmers. Farmers’ demand for cheap and good pesticide, companies’ demand for shortening the supply chain and serving farmers directly will all push e-commerce to develop rapidly. For the issues of logistics and technical services, we can transform existing distributors into service providers and logistics platform for e-commerce.

However, others who disagree with the views think agricultural e-commerce is a complex system engineer, it is different from FMCG and has many problems to solve, for example, as an emergency relief material, how to solve the logistics problems? How to change the credit sale habits among different distributor levels? How to train farmers’ consumption habit for e-commerce? How to provide farmers with technical service? How to solve the enterprise’s transformation for traditional channels?By how much can e-commerce decrease for the price? All of these require a long period of development.

But both sides think agricultural e-commerce will be a sure trend in the future, only but it still needs to be explored for which mode agricultural e-commerce is to go. Many enterprises said they have been into or are preparing to enter agricultural e-commerce. Among them, Rotam has built agricultural e-commerce platform by themselves, SINO-AGRI LEADING BIOSCIENCES CO..LTD has been worked with Nong Yi network . SiChuan GuoGuang Agrochemical Co..Ltd, JiangXi ZhengBang Bio-chemical Co..Ltd, JiNan ShiBang Agrochemical Co..Ltd are going to enter agricultural e-commerce ASAP so as to seize the super opportunity. (Farmers’ Daily)