The capacity for technological innovation is weak, and the level of technology and equipment is low. The varieties of pesticides are still mainly imitation, and the majority of companies’ R&D investment accounts for less than 1% of sales revenue; there are few green products, high toxic and high residual pesticides account for a certain percentage, and they have not yet been eliminated.
Miao Pengfei, director of the Ministry of Agriculture’s pesticide inspection institute, said that in addition to the large number of companies, small, scattered and disorderly phenomena, the duplication of product registration and fierce competition is also a bottleneck restricting the development of China’s pesticide industry. According to China’s pesticide registration data in 2014, the number of pesticide product registrations in China in the past two years has remained at more than 3,000, and 3,374 registered products in 2014, a decrease of only 1.6% from the previous year.
In response to this situation, the “planning” proposes to encourage mergers and acquisitions, joint-stock reforms, increase industrial concentration, eliminate backward production capacity, and by 2015, the top 20 pesticide production companies account for more than 50% of total output; The structure focuses on the development of high-efficiency, safe and environmentally-friendly insecticides and herbicides that account for more than 50% of the total production, and the production of highly toxic and high-residue varieties falls from 5% to below 3%.
In addition, various detailed policies formulated by various localities in line with the new “Environmental Protection Law” that began on January 1 this year have also greatly affected the pesticide industry. On the one hand, these policies require pesticide production enterprises to increase their investment in environmental protection and increase their production costs. On the other hand, they have promoted the elimination of outdated small companies that do not meet environmental standards. At present, this “double-edged sword” effect has emerged.
According to incomplete statistics, there are 20 major domestic listed companies for pesticides. Compared with 2013, 10 of the 20 listed companies experienced a decline in their total operating income last year, and 7 companies saw a negative growth in net profit, among which Beihai Guofa (600538, SH) and (002513.SZ) net profit. The drop exceeds 100%.
Zhu Qinghua, director of corporate affairs at Syngenta China, said that the domestic pesticide industry needs further waves of Ebbing and the industry is constantly reshuffling. Many companies are already in transition and are beginning to produce more efficient and environmentally friendly products. This depends on technological innovation.
The international pesticide market is fiercely competitive. The international pesticide companies such as Syngenta, Monsanto, Dupont, and Bayer have annual research investment accounts for about 10% of sales revenue. The “planning” mentioned that the vast majority of domestic enterprises R & D investment accounted for less than 1% of sales revenue, basic research is weak, and the potential for new product development is insufficient. The “Planning” requires that by 2015, the proportion of R&D investment in large and science-based pesticide companies accounts for more than 5% of the sales revenue, and the total R&D investment in the pesticide industry accounts for more than 2% of sales revenue.