GENERICS
developed world, with Brazil’s Agripec at number increase in the number of Chinese companies, five-year development plan (2006–10) to reduce
10. But by 2007 India’s United Phosphorus (UPL) which have risen from 19 in the 2001 edition to the total number of pesticide companies, create a
had crashed into the top 10, at number five, while 31 in the 2005 edition to 42 in the 2007 edition. few large “national champions” and encourage a
Agripec had progressed to number seven and In contrast, the number of profiled European greater focus on developing novel products.
China’s Red Sun was at number 10. Furthermore, companies has fallen from 29 in 2001 to 25
eight of the 10 companies taking the places from in 2005 to just 18 in 2007. This contraction is This transformation of the pesticide industry
11 to 20 were from either India or China (see due to European companies closing down their forms part of a larger effort to modernise the
Table 1). generic pesticide operations (Finland’s Kemira whole Chinese chemical sector. In May 2004, the
Fine Chemicals), going out of business (Hungary’s Chinese government formed the China National
The undoubted star performer over the past few Nitrokemia 2000) or completely disappearing off Chemical Corporation (ChemChina) to drive
years has been UPL. Fuelled by numerous company the radar (Italy’s IPiCi). this modernisation. In March 2005, ChemChina
and product acquisitions, UPL’s sales have grown announced that over the next five years it would
from US$140 million in the year ending March The rise in the number of Chinese companies is build up a giant state-owned pesticide group with
2002 to US$350 million just four years later. actually due to a combination of the European annual sales of over Yuan10,000 million (almost
This was sufficient to see UPL become the first contraction and the large number of Chinese 10 times larger than the annual sales of Red
developing world pesticide company to enter generics producers (around 2,500). This means Sun, which is currently China’s largest pesticide
Agrow’s list of the top 20 agrochemical companies that Chinese companies are simply the first choice company). As a first step, in June 2005 it took
in 2006 (at number 18). For the year ending to replace the missing European companies, control of Sanonda, which is one of China’s largest
March 2007, UPL recorded sales of US$477 million, although it does also reflect the increasing generic producers.
pushing it up to 13th place in the Agrow top 20. prominence of the Chinese pesticide industry.
For the year ending March 2008, UPL will be able But its most radical move came in November
to include sales from the US generics company Despite this prominence, the Chinese government 2007, when, in conjunction with the US private
Cerexagri, which it acquired in February 2007, is concerned that China’s pesticide industry equity firms Fox Paine Management III and the
giving its revenues another substantial boost. suffers from having too many companies, as Blackstone Group, it made a Aus$3,000 million
well as production overcapacity and outdated (US$2,760 million) bid for Australia’s Nufarm.
China modernises technologies and products. As a result, it fears If successful, this would result in the first
Also quite telling are the changes occurring in that the domestic industry could begin to lose Chinese ownership of a leading agrochemical
the list of 100 companies profiled in Volume 1 out to more innovative Western companies both multinational.
over the past few editions. Most obvious is the at home and abroad. It has therefore launched a
Nevertheless, the Chinese pesticide industry
Table 1: Top 20 generic pesticide companies by sales
1
is already having a major effect on the global
generic pesticide sector, especially in terms of the
Company Country Annual sales ($m)
1
Year
2
kind of ais that can be classified as “generic”. This
Makhteshim-Agan Israel 1581 2006
is reflected in the 10 new ais profiled in the 2007
Nufarm Australia 1253 2006
edition of Volume 2. Many of these ais, such as
Cheminova Denmark 680 2006
the insecticide thiamethoxam and the fungicide
Sipcam-Oxon Italy 378 2005
kresoxim-methyl, are already being produced
United Phosphorus India 350 2006 by a number of Chinese companies, and were
Cerexagri US 270 n/k therefore included in Volume 2 as generic ais,
Agripec
3
Brazil 198 n/k
even though they are still protected by patents in
Isagro Italy 196 2006
most major markets.
Amvac US 194 2006
The main attraction of these ais to Chinese
Red Sun China 153 2005
producers is clear, with kresoxim-methyl and
Xinan Chemical China 138 2005
thioamethoxam both generating substantial
Rallis India 133 2006
global sales, around US$400 million and US$375
Sanonda China 120 2005
million respectively. Most of the other new ais in
Taminco Belgium 119 2006
Volume 2 are also big sellers, with the insecticide
Meghmani Organics India 105 2007 fipronil generating annual global sales of around
Huaxing Chemical China 100 n/k
US$420 million and the herbicides glufosinate,
Rotam Hong Kong 100 n/k
nicosulfuron and fenoxaprop-P-ethyl and the
Excel Crop Care India 93 2007
fungicide epoxiconazole all generating annual
sales of over US$200 million.
Jiangshan Agrochemical China 90 n/k
AH Marks UK 84 n/k
Playing with fire
Notes:
1
Some entries include non-pesticide sales;
2
However, by manufacturing ais that are still
Refers to year in which company’s fiscal year ended;
3
Estimate based on percentage reduction from 2005 sales.
patent-protected in most major markets, these
Chinese producers are playing with fire. This was
8 January 2008  •  www.agrow.com
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