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Chinese agrochemical companies to expand in U.S.

Staff writer |
In the world of the "Big Six" agriculture-chemical companies, it's hard to sell products in the market dominated by few biggest brands, but that's what Chinese pesticide producers are looking to do.

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Dow Chemical, Syngenta, Monsanto, Bayer, BASF and Du Pont are producing the majority of their agriculture-chemical products in China, according to Telisport Putsavage, a pesticide industry expert and environmental counsel at Sullivan & Worcester law firm in Washington. At the same time, the Chinese government expects to see an increased effort by domestic agriculture-chemical companies to sell their own brands in the United States, which would increase China's market share in the global industry.

"One of the difficulties for any company, particularly offshore companies looking to enter the US, is figuring out a way to break into distribution. "These products do not go to the farmers and they don't even go directly into farm retail stores. They all go through distributors," said Mr. Putsavage.

In 2011, China's largest generic agricultural-chemical company, China National Chemical Corp (ChemChina), with nearly $32 billion in annual sales, put up $2.4 billion to acquire the world's largest generic agricultural-chemical producer, Israel-based Makhteshim Agan Industries, write China Daily. The deal helped ChemChina expand its production capabilities and it better positioned the company to break into the US pesticide market.

Pesticide companies have played a key role in driving the growth of China's chemical production output, which overtook that of the US for the first time in 2010. In 2012, China's chemical pesticide output increased 34 percent year-on-year to 3.6 million tons, according to the China Pesticide Industry Repor. That same year the operating revenue of Chinese pesticide manufacturers increased 21 percent to $38.5 billion and total profit was approximately $2.9 billion.

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