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Glyphosate Competitiveness Analysis in China

Report edition: 2008 edition(1)
Finished time:
Document type: PDF
Total pages : 253
Language version: English
Published by CCM
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CCM_sample_Glyphosate Competitiveness Analysis in China
  • Introduction
  • Main contents
  • List of tables
  • List of figures

Description:

This research is an extension of CCM's market research report on The Future of Glyphosate Industry in China. Many talent consultants in CCM spent one year to work out this masterpiece.







Glyphosate has been in a leading position of herbicides in the world in the past few years; it is estimated that the global consumption of glyphosate is over 600kts at present and will increase by CAGR of over 12%.



China, now the largest production base of glyphosate technical in the world, has glyphosate capacity accounting for more than 40% of the global total. With the output expected to reach about 280kts and the export volume 250kts in 2008, China’s glyphosate supply and price will have great impacts on the global market.



Since February 2007, China's glyphosate price has been surging, from the average price of about RMB34,000/t in February to RMB42,000/t as of September 2007. However, this is far from the end of the price rise. The price has kept soaring, from RMB58,000/t at the end of 2007 to the unbelievably record high, RMB95,000~100,000/t as of May 2008. But in 2006, the average price was only about RMB26,000/t.



Attracted by the huge market potential and the promising prospects of glyphosate, more and more domestic enterprises are busy either expanding their production capacities, or setting up new glyphosate production lines. The global production capacity of glyphosate is shifting to China and China has become the largest production base of glyphosate technical in the world with a capacity of 304,900t/a in 2007, accounting for more than one third of the global productivity. The output and export volume of glyphosate in China reached 187kt and 165kt respectively in 2007. It is estimated that the total capacity of glyphosate in China will reach 630,900 tonnes to the end 2008, based on the expanding plans of the glyphosate players in China.



Then why the production capacity of glyphosate technical is concentrating into China and where the competitiveness of China’s glyphosate industry lies in? Whether most glyphosate producers in the domestic market undoubtedly earn considerable profit? Where its price will go next? What will influence China’s glyphosate industry and how this industry will develop in the future? …



In this research, CCM will give a detailed analysis on glyphosate industry in China to help the readers understand in depth the competitiveness of China’s glyphosate industry, and to help the readers, mainly the decision maker to decide: whether is right to invest glyphosate in China, where to pay attention and how to access this market.





- Introduction



Because of the expanding planting of genetically modified crops and the fast growth of the agriculture in developing countries, Glyphosate develops rapidly these years. It is estimated that the annual growth rate of glyphosate will keep at 14% in the next few years in the world, and the global demand of glyphosate will reach 900,000 tonnes in 2010. Attracted by the huge market potential and the promising prospects of glyphosate, more and more domestic enterprises are busy either expanding their production capacities, or setting up new glyphosate production lines. It is estimated that the global production capacity of glyphosate will shift to China in the future and the gap between demand and supply will be filled in the next two years.



The technology development is also quite rapid in China . There are two different pathways of glyphosate production in China : aminoacetic acid (AEA) pathway and iminodiacetic acid (IDA) pathway, about 60% of the domestic glyphosate producers take the AEA pathway and the rest 40% take the IDA route.



AEA pathway, as a traditional pathway in China , is widely applied in China 's glyphosate production, because of the easy availability of raw material and mature technology. Many glyphosate producers are close to glycine manufacturers, which means lower transport costs and guaranteed glycine supply . But the AEA pathway consumes a lot of alkali to recycle the solvent and catalyst, which increases the equipment expenditure and utility. What's more, the product quality by this pathway is not as good as that by IDA pathway. So in recent years, the AEA pathway is partly replaced by the IDA pathway. However, some glyphosate producers adopting AEA pathway have innovated this pathway and made better use of their by-products, so that the production cost can be reduced.



Although the raw material diethanolamine is mainly imported from some overseas countries and its price is rising all the time, IDA pathway is widely applied in most newly-built glyphosate projects in China these years, because of the comparative advantages in yield, production cost, environment protection and investment, Recently Anhui Huaxing Chemical Industry Co., Ltd. researched and developed a new Hydrocyanic acid-IDA-Glyphosate process, which extracts hydrocyanic acid from the nature gas. When the production line is put into operation, the cost can be reduced by RMB3,000 per tonne than the current level.



What is the detailed situation of the competitiveness of AEA pathway and IDA pathway? In what aspects are they competitive? It is claimed by many people that the hydrocyanic acid process will be widely applied and used in the domestic market, and the AEA pathway will be replaced by the IDA pathway and the IDA pathway will be the dominant glyphosate producing pathway in the future. Is that true? Why? If it is true, how long will the process of this substitution take? If it isn't, what are the factors hampering this substitution? CCM will give a detail analysis in order to answer all these questions in this report.



Although the output is growing all the time, the global price of glyphosate has been rising. One tonne of glyphosate was priced only at RMB28,000 last year, but the price has soared to nearly RMB50,000/t at present, that is, November 2007. The main reason for the price hike of glyphosate this year is the current demand and supply situation. Monsanto, a world renowned company, also the largest glyphosate producer in the world, has stopped investing in its glyphosate production capacity expansion, and has started to buy raw materials from China for their glyphosate production. Meanwhile, the output from the domestic glyphosate producers can not satisfy the huge demand in the overseas market. All these factors contribute to the tense supply and high price of glyphosate.



With the price hike of glyphosate, more and more profit has been gained by domestic glyphosate producers. The net profit was once several times of the production cost this year, although the current production cost is much higher than that in the past. What is the actual cost structure of glyphosate in active producers by different pathways? How does the production cost influence domestic glyphosate production and sales? In this report CCM will give an in-depth analysis of the production technology and production cost in some major glyphosate producers.



In recent years, the Chinese government imposes stricter and stricter rules on the agrochemicals industry and environment protection, and the production cost of glyphosate including raw materials, manufacturing cost and management cost is rising all the time. These factors will inevitably contribute much to the development of glyphosate industry in China .



Under such circumstances, it needs to find out:



? What factors influence the development of glyphosate industry, especially the price and profit of glyphosate?



? In the future, which pathway will be the dominant route in glyphosate production in China , and why? Will AEA pathway be replaced by IDA pathway in the future? How is the prospect of hydrocyanic acid process?



? What is the price trend?



? During the current and future production capacity expansion by domestic producers, whether most glyphosate producers in the domestic market undoubtedly earn considerable profit at the moment? How do policy adjustment, production cost rising and other factors influence the development of profit in the future? Will the profit keep stable in the next few years?



? Which producer has the largest competitive advantage in China now?



? How does the prospect of glyphosate industry in the future?



CCM will give you a professional analysis to the above questions in this benchmarking research.



- What is the aim of this research?



CCM's research on glyphosate competitiveness analysis in China offers a comprehensive guide to the current technology situation and production cost structures of Chinese manufacturers.



1) Analyze the factors influencing the competitiveness landscape of China’s glyphosate industry, such as supply and demand dynamics, production pathways & technology level, raw materials supply, macro-economic situation and government policies, to understand where Chinese glyphosate competitiveness lies.

2) Research systematically the different processes for glyphosate production and the current production situation of the Chinese producers in an effort to understand their production cost structures, how the different production pathways compete with each other, and how the technology will evolve.

3) Set up model for glyphosate cost in China and make comparison to different cost structures of the major producers in China.

4) Carry out comparison between the competitiveness of AEA pathway and IDA pathway, and analyze the competitiveness landscape of glyphosate production in China.

5) Identify the key factors influencing the price of glyphosate and the internal relationship between the key factors. And then set up glyphosate price model.

6) Based on the work mentioned above, make a forecast on the competitiveness of China’s glyphosate in the next five years.



- Why to purchase the research?



? To understand the current technology level, cost structure, price and profit in Chinese glyphosate market.



? To understand the competitive landscape of Chinese glyphosate producers.



? To forecast the future development of glyphosate industry in China .



? To help make decisions: whether is right to invest glyphosate in China ?



- Who should buy this research?



? Glyphosate producers paying close attention to the Chinese technology level, cost structure, price and profit of major competitors in China ;



? Glyphosate buyers who purchase glyphosate from Chinese manufacturers;



? Glyphosate investors who plan to enter China to build new plants;



? Technology suppliers who own the latest or best production and processing technology, and want to transfer their technology to Chinese glyphosate producers;



? Research institutes who desire to know current technology level and research status in China ;



? Analysts and consultants trying to gain insight into China 's fast-growing market for glyphosate



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