Our country will accelerate the standardization process of the pesticide industry.

Many people cannot understand the current bleak situation in the pesticide industry, believing that the pesticide market is too dismal. In fact, this is due to the long-term adverse environment of the pesticide market in our country. The government is currently making significant efforts to rectify the pesticide industry, which inevitably leads to a period of overall downturn in the pesticide sector. If we can endure this period, the pesticide industry will develop in a healthier and faster manner.
Due to the annual decline in the growth rate of the industry's main business income, the total profit of the industry has nearly stagnated. Since 2014, the number of domestic pesticide manufacturing enterprises has significantly decreased, and the growth rate of fixed asset investment in the pesticide manufacturing industry has also been decreasing year by year.
Statistics from the China Agricultural Industry Association show that in 2014, there were 843 enterprises above the designated size in the national pesticide industry, and in 2015, there were 829, with a decrease of 25 enterprises in the number of chemical raw material enterprises above the designated size. The latest statistics indicate that in 2016, the number of enterprises above the designated size in the national pesticide industry was about 804.
According to statistics from CITIC Securities, in 2014, the growth rate of fixed asset investment in China's pesticide industry was about 13%, while in 2015 it was 3%, a decline of 10 percentage points compared to 2014.
Dongxing Securities pointed out in its research report that during the central environmental protection inspection action in 2016, many industrial parks in various provinces and cities were required to rectify and upgrade, especially in areas with lower environmental protection thresholds. Some enterprises that did not meet environmental standards have been permanently shut down, which has a significant impact on the production bases and enterprises of pesticide raw materials, especially intermediates. The "one-size-fits-all" administrative measures for environmental protection have posed great challenges to pesticide production. Currently, many raw material varieties and intermediate varieties are in extreme short supply, pushing some product prices to historical highs. The increase in environmental protection thresholds and market entry conditions will benefit enterprises in the industry that are above the designated size and have complete environmental protection facilities, highlighting their competitive advantages and prompting the spontaneous elimination of backward small production capacities in the industry.
Public information shows that on May 26, 2016, the China Pesticide Industry Association officially released the "13th Five-Year Plan for the Development of the Pesticide Industry" (hereinafter referred to as the "Plan"). According to the plan, by 2020, the number of pesticide raw material enterprises in China will be reduced by 30%. Among them, there will be more than 5 pesticide production enterprises with annual sales exceeding 5 billion yuan, and more than 30 enterprises with annual sales exceeding 2 billion yuan. The plan aims to cultivate 2-3 large enterprise groups with annual sales exceeding 10 billion yuan and international competitiveness; the cumulative sales of the top 20 pesticide enterprises in the country will account for more than 70% of the national total sales; 3-5 specialized pesticide production parks will be established, and by 2020, the goal is to have more than 80% of pesticide raw material enterprises enter the chemical concentration area.
On February 14, 2017, the Shandong Provincial Department of Agriculture issued a notice to arrange and deploy the concentrated cleanup and rectification of pesticide production enterprises suspected of violations. The Shandong Provincial Department of Agriculture requires the pesticide regulatory authorities in relevant cities to organize efforts to conduct a thorough investigation of suspected enterprises, to focus on supervising the products produced by the aforementioned pesticide production enterprises, and to resolutely not inform or publicize illegal pesticide products. They will seriously investigate and deal with pesticide products produced and operated without registration certificates, and transfer to judicial authorities if necessary. At the same time, the Department of Agriculture also requires that a written summary of the concentrated cleanup and rectification situation be submitted to the Provincial Pesticide Testing Institute by the end of July 2017.
The increasingly strict environmental protection regulatory system has increased the environmental treatment costs of enterprises during the production process. The production capacity of severely polluting, outdated production processes, and highly toxic pesticides will gradually be shut down, leading to a continuous contraction of supply.