Industrial concentration of Chinese glyphosate increases further in H1 2012, and China's top five glyphosate producers' proportion of export volume and value of glyphosate A. I. has increased to 64% and 70% respectively in H1 2012, up 8% and 13% H1 2011.

1. Operating performance of four listed glyphosate companies may improve further in H2
2012
Summary: Industrial concentration of Chinese glyphosate increases further in H1 2012, and
China's top five glyphosate producers' proportion of export volume and value of glyphosate A. I.
has increased to 64% and 70% respectively in H1 2012, up 8% and 13% H1 2011.
Tag: Glyphosate, seme-annual report, profit, loss, subsidiary, integration, industrail concentration,
wastewater, technology, technique, price, volume, manufacturer, destination
The market situation of glyphosate has improved in H1 2012, which may last and improve the
operating performance of four listed glyphosate companies further in H2 2012, according to
CCM’s September Issue of Glyphsoate China Monthly Report.
If the improved market situation of glyphosate last in H2 2012, it's estimated that four listed
glyphosate companies' operating performance will improve further in H2 2012, or even they all
can be profitable this year (TABLE 5).
On 28 Aug., 2012, Zhejiang Wynca Chemical Industry Group Co., Ltd. (Zhejiang Wynca) released
its 2012 semi-annual report and claimed that it would achieve an estimated profit of about
USD4.26 million (RMB27 million) in Q3 2012, and thus Zhejiang Wynca would achieve break
even in net profit attributed to shareholders in the first nine months of 2012.
On 22 Aug., 2012, Anhui Huaxing Chemical Industry Co., Ltd. (Anhui Huaxing) released its 2012
semi-annual report and claimed that it would achieve an estimated profit of about USD2.13-2.92
million (RMB13.5-18.5 million) in Q3 2012, and thus Anhui Huaxing would achieve net profit of
about USD1.26-2.05 million (RMB8-13 million) in the first nine months of 2012.
The other two listed glyphosate companies, Nantong Jiangshan Agrochemical & Chemicals Co.,
Ltd. (Nantong Jiangshan) and Jiangsu Yangnong Chemical Co., Ltd. (Jiangsu Yangnong), both
achieved good net profit in H1 2012, and it's estimated that the two companies would maintain
their good performance in the second half of this year.
The demand for glyphosate from overseas is still very strong in Q3 2012 and is likely to last till
Q4 2012, which will promote the export volume of the four companies further. It's estimated that
the revenue in the four companies would remain stable in H2 2012, or even exceed that of the
first half of this year.

2. In H1 2012, the export volume of glyphosate A. I. from Zhejiang Wynca, Nantong Jiangshan and
Jiangsu Yangnong has increased by 16%, 20% and 61% respectively, with export value
increasing by 41%, 42% and 94% accordingly over that in H1 2011 (FIGURE 7). Because of the
mismanagement and shortage of operating funds, Anhui Huaxing didn't grab the sales
opportunity in H1 2012, and its export volume and value of glyphosate A. I. decreased by 33%
and 16% respectively. After the completion of acquisition by a strong company, namely CEFC
Shanghai Oil Group Co., Ltd., Anhui Huaxing's problem of operating fund shortage and
mismanagement would be improved greatly, which would have a good effect on Anhui Huaxing's
operating performance in H1 2012.
The prices of yellow phosphorous, glycine, IDAN and PMIDA have increased little in Q3 2012, but
the prices of these raw materials except yellow phosphorous will not increase greatly in Q4 2012
due to the overcapacity and limited demand under the situation of slow development in China's
manufacture industry. Besides, the price of glyphosate is still increasing in Q3 2012, and it's likely
to maintain at a high level in Q4 2012 mainly due to the strong demand for glyphosate and strict
environmental protection policy, which will promote the situation of profit in the four companies
further.
The development of China's manufacture industry was very low in H1 2012 and this situation is
likely to last in H2 2012, which meant that the prices of raw materials for producing glyphosate
including yellow phosphorous will not increase greatly in H2 2012. According to the
announcement from National Bureau of Statistics of China, the Purchase Management Index
(PMI) was 49.2% in Aug, 2012, down 0.9 percentage point over that in previous month, which
was the first time to decrease below the gloom-boom index of 50 in China in 2012.
Besides, the quantity of restarting production in small and medium-sized glyphosate producers
would not be too much due to the high cost in environmental protection, leading to the limited
increase in glyphosate supply, and thus the price of glyphosate will stay at a high level in H2
2012. It's heard that China's Ministry of Environmental Protection will carry out a check in China's
pesticide industry, and the companies which can't reach the waste treatment standard will be
ordered to stop production.
Furthermore, in H1 2012, the operating rate and gross profit margin of glyphosate business of
Zhejiang Wynca, Nantong Jiangshan and Jiangsu Yangnong in H1 2012 was about 100%, 90%,
70% and 11%, 5%, 10% respectively, all increased over that in H1 2011. The operating rate of
Anhui Huaxing in H1 2012 was about 39%, down 17 percentage points over that in H1 2011, but
its gross profit margin in glyphosate business was 9%, up seven percentage points over that in
H1 2011. After solving the problem of operating fund shortage, it's estimated that the operating
rate of Anhui Huaxing would increase in H2 2012.

3. According to CCM' s analysis report on glyphosate price, as to Aug. 2012, the price of
glyphosate technical was about USD4,646/t, up 22% over that in Jan. 2012 (FIGURE 7).
The prosperity in China's glyphosate industry resulting from the improved market situation of
glyphosate is a special scenery in China's bleak chemical industry at present, but for the
glyphosate producers which have witnessed the miserable situation in China's glyphosate
industry in the past three years, how to improve the operating performance would be the most
important thing in H2 2012 and the future coming years.
Source: Glyphsoate China Monthly Report 1209
http://www.cnchemicals.com/Newsletter/NewsletterDetail_14.html
Content of Glyphsoate China Monthly Report 1209:
Zhejiang Wynca suffers huge profit loss in H1 2012
Anhui Huaxing can't turn loss into gain in H1 2012
Jiangsu Yangnong: Glyphosate business promotes its operating performance in H1 2012
Nantong Jiangshan is unsuccessful to sell glycine-supply subsidiary——Dongchang Chemical
Operating performance of four listed glyphosate companies may improve further in H2 2012
China's glyphosate industry: Market integration is accelerating in 2012
Overview of export rebate abolishment in China's glyphosate technical from August 2009 to July
2012
Zhejiang Wynca achieves breakthrough on treatment technique of glyphosate wastewater
Glyphosate price continues to surge in September 2012
Export price of glyphosate technical increases by 3.17% in July 2012
Glyphosate China Monthly Report, a monthly publication issued by CCM International on 20th
of every month, will keep track of latest dynamics, hotspots and competitiveness analysis, and
forecasts on market trends of China’s glyphosate industry.
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Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1222.html