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Chinese government is increasingly concerned about the impact of pesticides on the environment, and constantly issues relevant measures to further manage the pesticide industry. In June 2013, the Ministry of Agriculture of the People's Republic of China (MOA) issued a notification that China will strengthen the risk monitoring and the guidance for the usage of 2,4-D butylate and its mixed products; Hunan Province issued eight prohibitions regarding the pesticide production to impel the self-regulation of pesticide enterprises; The MOA plans to take measures such as prohibiting or restricting the use of metsulfuron-methyl, chlorsulfuron and ethametsulfuron in some specific production steps or in specific products.
Facing with the increasingly stringent environmental requirements of governments and the increasingly intense competition in the market, many pesticide enterprises put forward strategies to enhance their own development. For instance, Good Harvest-Weien and Jiangsu Institute of Ecomones continue to strengthen their competitive businesses, while Noposion is planning an asset reorganization.5. Jiangxi Shilei is to install the equipment for its fluorine chemical project in July 2013.Noposion to plan an asset reorganization in July 2013
On July 8, 2013, Shenzhen Noposion Agrochemicals Co. Ltd. (Noposion) announced that its stocks (stock No. 002215) would be suspended from trading from that date onwards due to a significant asset reorganization planned by the company. According to the announcement, Noposion is committed to lay out the proposal of the asset reorganization before August 6, 2013. After the proposal is approved by the company's board of directors and announced to the public, its stock will resume trading.
After the announcement came out, many market participants suspect that the significant asset reorganization refers to the acquisition of Jiangsu Changlong Chemicals Co, Ltd. (Jiangsu Changlong), which is a pesticide technical supplier for Noposion. Jiangsu Changlong is one of the large-scale manufacturers of pesticide technical, ranking in the top ten of technical manufacturers in China. Market participants speculate that the sudden suspension of Noposion's stocks is probably due to Noposion's acquisition of Jiangsu Changlong.
Insiders from Noposion's Securities Department said that the company has been negotiating with Jiangsu Changlong about a possible acquisition. However, they were not at liberty to disclose the real reason for the suspension.
On March 26, 2013, Noposion announced that the company intended to acquire Jiangsu Changlong's shares. At that time, the company stated that the acquisition was still in the early stages, and that it had not yet signed any letter of intent. However, the company has not released any announcement regarding the details of the acquisition.
Some experts believe that Noposion will ensure stability in the source of raw materials especially for pesticides technical, diversify its product categories and enhance its marketing ability if it is successful in acquiring Jiangsu Changlong. It is no doubt that at present, Noposion's pesticide formulation varieties and marketing channels are far more advanced than its competitors. However, Noposion's competitive disadvantage is that it has no production bases for pesticide technical, which is the main upstream source. Acquiring Jiangsu Changlong could address this disadvantage.
Noposion, a listed company of producing pesticide formulation in China, engages in production, R&D and marketing of pesticide formulation. Its headquarters is located in Shenzhen City, Guangdong Province and its manufacturing base is in Dongguan City, Guangdong Province. Its products are mainly sold in the domestic market, especially East China, South China and Central China.
Currently, Noposion is one of the biggest agrochemical enterprises in China, with a pesticide formulation capacity of over 100,000t/a. In Q1 2013, Noposion's revenue was USD80.27 million (RMB505.71 million) with a net profit of USD7.61 million (RMB47.93 million). Its revenue and net profit increased by 11.43% and 13.26% year-on-year respectively. The company's net profit was predicted to increase by 10%-40% in H1 2013, reaching USD20.34 million-USD25.89 million (RMB128.15 million-RMB163.10 million).
Sinochem agro actively expands overseas pesticides market.
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