Agriculture is very important for China, as China has less than 10% global tilled land and has to feed over 20% global population. Threatened by reducing tilled land and water resources as well as increasing demand, the food security has become more and more important. Thus, pesticide, fertilizers and feeds which can greatly improve production efficiency of agriculture have great market potential in China now and in the future.

1. China Agriculture Investment
Bimonthly Report
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2. China Agriculture Investment Bimonthly Report
A griculture is very important for China, as China has less than 10% global tilled land and
has to feed over 20% global population. Threatened by reducing tilled land and water
resources as well as increasing demand, the food security has become more and more
important. Thus, pesticide, fertilizers and feeds which can greatly improve production
efficiency of agriculture have great market potential in China now and in the future.
Currently, the pesticide, fertilizer, feed and food industries are not so developed in China,
production accidents and food safety accidents happen frequently. In order to improve
these situations and ensure the food security, the Chinese government has carried out
a series of policies. These policies will obviously activate development of the related
industries in the near future and will also accelerate the industry concentration ratio in
China.
Figure 1 Focus of China Agriculture Investmnet Bimonthly Report
Economic environment
Risks
Intermediate
Enterprises M&A in China
Seed Pesticide Fertilizers
Agriculture Feed
Food
Opportunities
Government
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3. China Agriculture Investment Bimonthly Report
Pesticide: Under supervision and keeping upgrading
China's pesticide industry witnesses fast development and made some positive actions to
protect domestic planting agriculture, public healthy, etc. in recent years. According to
National Bureau of Statistics of China, pesticide total output hit over 2.67million tonnes
in 2010, up 20.34% year on year. As the most important pesticide exporter in the world,
China exported about 0.51 million tonnes of pesticides in 2010, valuing approximately
USD420 million.
However, without proper management
by government, many problems like
overcapacity and high pollution have
been increasingly serious in this industry,
blocking its further development. In order
to stop current chaotic market, build large
scale companies, enhance international
competitiveness of the whole industry,
etc., the Chinese government has released
a series of policies like China's Pesticide
Industry Policy to accelerate the industry
upgrading, thus fastening domestic
industrial M&A. Actually, with continuous integration, some
companies like Sinochem Group and China
National Agrochemical have been becoming
more and more important in international
pesticide market. Meanwhile, the weak
pesticide players with weak competitiveness,
high energy consumption, mass pollutant
emission, etc. will be weeded out in the future
in China.
Obviously, many commercial opportunities will emerge along with the
changes in China, such as new investment in potential company/products,
production expansion by asset integration, etc.
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4. China Agriculture Investment Bimonthly Report
Fertilizers: Under strict supervision and merging
The fertilizer industry mainly consists of nitrogenous fertilizers, phosphatic fertilizers and
potash fertilizers as well as NPKs and foliar fertilizers.
Thanks to the modernization of agriculture in China, the demand of fertilizers increases
year by year. Because of decentralized demand of fertilizers in China, there were many
small fertilizers plants dispersed in China in the past, with the industry upgrading and the
market developing, the M&A in this industry happens more and more frequently. Now in
China, urea production in recent years has been more and more concentrated in the coal
enterprises. The M&A trend in fertilizer industry will continue in the near future.
Traditional Modern
Considering the close relationship with nature resources and harvest of crops, the Chinese
government has strict supervision on fertilizer production, distribution, import and export
to ensure the domestic supply.
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5. China Agriculture Investment Bimonthly Report
Feed: Strict supervision and fast developing
Feed is important for meat supply because now feed is widely used in animal breeding and
aquaculture to improve the production efficiency in China. Feed industry has extensive
room to increase in the next few years in China. Now, China is the second largest base of
feed in the world, and in 2010, its total output of feed reached over 150 million tonnes,
accounting for about 20% of global total output. But the per capita feed amount in China is
just one fifth of the US’s. Thus, it’s predicted that Chinese feed industry will witness great
development in future, and the market demand for feed may amount to over 200 million
tonnes in 2015.
However, current development model of Chinese feed industry can not catch up with its
development. At present, there are hundreds of feed manufacturers at home, and most
of them are small ones, which can’t promise the safety of feed products. Besides, the
scattered development model restrains the upgrade of feed products and R & D progress,
thus Chinese feed industry needs to improve industry concentration ratio, which will be
the major develop tendency in future.
It’s believed that Chinese government will strengthen the supervisor on feed industry,
and more and more small manufacturers will be washed out. In the meantime, leading
manufacturers will keep expanding their capacity and output, and to merge and acquire
small players is also their priority option to grab more market share.
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6. China Agriculture Investment Bimonthly Report
Food: Lack of supervision and facing crisis of confidence
The food industry, including agricultural food processing, food manufacturing and
beverage manufacturing sub-industries, is a main constituent part of China’s economy.
The food industry has realized sales value of USD667.44 billion in 2009, up 18.82% over
2008, and the sales captures 12.92% of China’s GDP in 2009. And China’s food sales were
USD677.45 billion in the first nine months of 2010, up 26% over the same period of 2009.
China’s food industry is promising and the next five years are expected to be the golden age
of food consumption.
Along with the rapid development of China’s
food industry, many food scandals and incidents
broke out, which badly hit domestic consumers’
confidences and impel the government to launch
stricter policies, thus quickening the upgrading
of food industry.
China’s dairy industry is a typical example, affected by the 2008 melamine scandal and
the subsequent incidents, the government launched many policies, such as the policy
about production licenses reapplication recently. Affected by this policy, there are only
643 dairies being approved by March 2011(accounting for 55% of China’s 1,176 dairies sent
their application to the government, while in fact there are believed to be at least 2,000
dairy processors in China before). And the consolidation is expected to be continued in
the future, including the acquisition in China, such Mengniu acquired Junlebao Dairy –
top 4 yogurt processor in China in November 2010, and the acquisition overseas, such as
Ausnutria Dairy acquired 51% stake of struggling Dutch dairy business Hyproca in March
2011.
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7. China Agriculture Investment Bimonthly Report
What’s the scope?
Industries related to agricultures such as:
Pesticides, including insecticide, herbicide, fungicide, plant growth regulator, etc.
Intermediates of pesticides, adjuvant
Seeds
Fertilizers, including inorganic fertilizers, organic fertilizer, foliar fertilizer, etc
Edible oil and foodstuffs
CCM Methodology
Desk research
The sources of desk research are various, including published magazines, journals,
government statistics, industry statistics, association, seminars as well as information from
the Internet.
Telephone interview
CCM will interview events related party to gain first-hand information.
Questionnaire
CCM will set questionnaire on events to collect experts’ views and opinions.
Face-to-face interview
CCM carries out face-to-face interviews with industry insiders to make in-depth analysis &
comment on relative issues.
Experts consultancy
CCM has established long-term business relationships with experts in each industry via
payment or information offering, and they would contribute stories or comments to CCM
in return.
Why to subscribe?
Trace the latest M&A event for you business decision.
Master the current industry environment in China.
Get the changes in related industry policy in time to avoid the potential business risks.
Discover M&A event’s influence on the whole industry.
Know the insiders’ opinions about the latest policies and events.
Who need it?
Companies and researchers interested in China agriculture relative industries.
Companies with the intention of developing in China to cooperate with domestic
companies.
What you will have?
PDF newsletter bimonthly, 6 issues per annum.
Access to online archives of all previous issues with downloadable files
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8. China Agriculture Investment Bimonthly Report
Main content
Enterprises dynamic (about 5 topics)
• Report the latest dynamic of key enterprises in this industry
Macro economy update (about 3 topics)
• Macro economy environment analysis
• Industrial macro analysis
• Investment and financing environment analysis
M&A dynamic and analysis (about 6 topics)
• Report the latest M&A event in China with CCM’s analysis.
• Trace the latest M&A dynamic in China.
• Comments from companies, associations, experts, consumers, etc.
• M&A feasibility analysis
Central and local policy analysis (1~2 topics)
• Introduction to new policies affecting domestic agriculture industry
• Analysis on impact of policies on the industry
• Comments from companies, associations, experts, consumers, etc.
Legislation & rules update (1~2 topics)
• Introduction to new policies and legislations affecting domestic agriculture industry.
• Analysis on impact of the legislations on the industry
• Comments from companies, associations, experts, consumers, etc.
The Interview (1~2 topics, this column may not appear in each issue.)
• Key company’s interview on the M&A event, policy and legislation & rules
• Companies strategies to respond to the legislation
Price update (about 5 topics)
• Key pesticides
• Key edible oil and foodstuff
• Key fertilizers
• Key seeds
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