The plan points out that during the “14th five year plan” period, the industry will adhere to the four principles of safe development, green development, high-quality development and innovative development, and accelerate the transformation and upgrading of the pesticide industry.
Interpretation of key contents of development planning:
From the perspective of enterprises: the plan points out that enterprises are encouraged to merge and reorganize, the whole chain production layout, promote the development of pesticide enterprise groups, brands and internationalization, gradually change the pattern of large, small and scattered pesticide enterprises, and cultivate a number of competitive large and medium-sized production enterprises. By 2025, we will focus on cultivating 10 enterprises with an output value of more than 5 billion yuan, 50 enterprises with an output value of more than 1 billion yuan and 100 enterprises with an output value of more than 500 million yuan.
From the perspective of industrial layout: optimize the production layout, guide pesticide enterprises to settle in compliance parks that meet the industrial positioning and carry out planning and environmental impact assessment in accordance with the law, speed up the withdrawal of high-risk and high pollution production capacity and control excess production capacity. The output value of pesticide production enterprises in the park increased by 10 percentage points.
From the perspective of products: promote the reduction of the use of chemical pesticides. We will support the development of new chemical pesticides with high efficiency and low risk, vigorously develop biological pesticides, phase out old pesticide varieties, and strictly control high-toxic and high-risk pesticides and additives with long-lasting and difficult degradation and bioaccumulation. By 2025, by eliminating highly toxic and inefficient chemical pesticides and promoting efficient and accurate application technology and equipment, we will strive to increase the utilization rate of chemical pesticides in major crops to more than 43%, and gradually realize the high efficiency, green and harmless of pesticide dosage forms.
Encourage technological innovation and promote green and cleaner production. Encourage enterprises to strengthen technological innovation and process transformation, and promote cleaner, low-carbon and recycling of pesticide production; Encourage equipment renewal, promote the automation, continuity and intelligence of production process, and reduce greenhouse gas emissions and unit energy consumption. Establish and improve the green standard system of pesticides, improve the quality of pesticide products and promote the green and high-quality development of pesticides.
Analysis on the impact of development planning on the industry:
According to the statistics of agbioinvestor, a British consulting firm, the global pesticide market will reach US $60.8 billion in 2020. It is expected that the average annual compound growth rate of the market will reach 2.3% in the next five years. In 2020, the market scale of China’s pesticide industry increased to 45.4 billion yuan, with an average annual compound growth rate of 2.2% since 2015. It is estimated that the overall market scale will reach 54.1 billion yuan in 2025, and the average annual compound growth rate is expected to reach 3.6%. More advanced and sustainable plant protection product technology will become a new growth point. After years of development in the global industry, the industry has formed a “tripartite” pattern of the United States (Dow DuPont), the European Union (Bayer Monsanto) and China (Sinochem Syngenta).
In recent years, the output and use of pesticides in China have declined, but the products continue to upgrade and the utilization rate of pesticides has gradually increased. The pesticide industry has a broad development space. China has become a major producer and exporter of pesticide products in the world. Chinese pesticide enterprises are facing better development opportunities. The leading companies in the industry represented by listed companies have developed rapidly in recent years, but the current industry concentration is still low, and there are few large and medium-sized enterprises. According to statistics, only six enterprises have an output value of more than 5 billion yuan in 2020.
With the introduction of the 14th five year plan and the continuous promotion of relevant policies and regulations, leading companies with technology accumulation and advantages and products in line with the development direction of high efficiency and low toxicity may usher in better development opportunities for process safety and environmental protection. With the implementation of policies such as entering the park, the capacity expansion of the standardized company will continue to promote the long-term sustainable development of the enterprise.
Investment suggestions:
Optimistic about the industrial and product upgrading of China’s pesticide industry under the guidance of policies, optimistic about the long-term development of leading companies under the background of the improvement of long-term industrial concentration, and recommend investment opportunities of relevant listed companies, such as Lier Chemical Co.Ltd(002258) , Lianhe Chemical Technology Co.Ltd(002250) .
Risk tips
1) the price of upstream raw materials fluctuates greatly due to power and production restriction, environmental protection and other factors; 2) The global epidemic situation has changed.
