Barriers to entry of pesticide industry in China in 2017

1, qualification barriers

China strictly from the manufacturer to control the production of varieties of pesticide production, production of pesticide products need to be "cards complete, namely the production of a variety of pesticides also need access to the pesticide registration certificate, the national industrial products production license (applicable to pesticide products have a national standard or industry standard) or pesticide production approval certificate (pesticide products only applicable to the enterprise standard) and pesticide product quality standard filing before production. Acquire and retain the "three certificates" of pesticide enterprises in the production conditions, the implementation of quality specifications, scientific management and clean production requirements have a trend of increase. Does not have "three certificates" of the enterprise to pesticide production.

2, technical barriers

According to the degree of patent protection of pesticide technology, pesticides can be divided into two kinds of patent pesticides and non patented pesticides, among which, non patented pesticides can be divided into patent expired pesticides and patent free pesticides. At present, in the patent of pesticide, Syngenta, Bayer, BASF, Dow, DuPont, Meng Shandou and other six pesticide companies by virtue of its strong capital strength and technical strength, on behalf of the leading global patent pesticide research and development and production. In terms of patent expiration pesticides, technical barriers are mainly embodied in the residual rate, purity control and other aspects, mainly through the new production equipment input and production process technology breakthrough and optimization to achieve. It is difficult for the small manufacturers with insufficient capital strength and technical strength to maintain the advanced technology and product quality through sustained technical input, so as to be passive in the market competition.

3, environmental barriers

Environmental protection barrier is mainly embodied in two aspects: pesticide product itself and production process. The pesticide product itself, with "on international trade for certain hazardous chemicals and pesticides in the prior informed consent procedure of the Rotterdam Convention", "on persistent organic pollutants and the" Stockholm Convention "on chemicals registration, evaluation, Xu Kehe act" and other international conventions and national and regional regulations more stringent. Some pesticide products major damage to the ecological environment and human health are prohibited to use. At the same time, to allow the use of pesticides, the environmental indicators of harmful impurities in the residual rate also have tighter situation, for example, the United Nations Food and Agriculture Organization in 1998 under chlorothalonil six chlorobenzene maximum content in the product is 300ppm, and now this standard has been restricted to 40ppm, and some customers have asked provide 10ppm products. The improvement of standards has greatly increased the difficulty of sustainable profitability for some manufacturers who can not improve production technology and improve the environmental protection level of the products. In addition, the pesticide product environmental requirements are also extended to the whole process of pesticide production, increasingly stringent environmental regulations in pesticide production enterprises from the production process control to the end of the whole production chain governance environmental control effectively, which will affect the production and application of pesticides on the protection of ecological environment at the lowest level, and the a control into the overall assessment of pesticide production enterprises, improve the pesticide production and sales compliance difficulty.

4, customer confidence barriers

Based on the strict requirements of environmental protection laws and regulations, the quality and environmental compliance of pesticide products will directly affect their access to a particular market, especially the European market with high environmental protection requirements. Therefore, the downstream manufacturers higher requirements for pesticide and preparation of product quality and environmental protection, early selection of suppliers, the link is more comprehensive, the verification process is longer, at the same time, as a product of a manufacturer in a specific area of pesticide registration also need to pay a certain amount of manpower cost; in the process of sustainable procurement pay attention to their suppliers, legal requirements and market needs timely communication, the process of the objective to promote the technical vendors to upgrade the quality of products. Trust after years of cooperation and the formation of both has to pay the cost of registration as a material basis, and a continuing guarantee product quality requirements as a follow-up driving force, so the cooperation between each other is relatively stable, want to break this relationship of trust is difficult to enter new markets.

5, the scale of funding barriers

China pesticide industry access system, the country developed a higher threshold for the newly approved pesticide companies registered capital of enterprise culture is not less than 50 million yuan, the scale of investment of not less than 50 million yuan (excluding land use fee); preparation (processing, compound) enterprises registered capital of not less than 30 million yuan, the scale of investment of not less than 20 million yuan (excluding the land use fee). At the same time, the current development of the industry trend, pesticide manufacturers in order to meet the large demand for downstream customers, to ensure the reliability and stability of pesticide product quality, usually need high performance R & D and production equipment, the equipment is generally based on the high price of imported equipment, with high-quality personnel with rich experience in the industry, and therefore need to have the financial strength to meet the talent, technology, environmental protection and other aspects of the investment. Thirdly, pesticide products generally need to undergo a longer period of qualification certification and market research period, which requires enterprises to have enough liquidity to support the operation of the project. New entrants in the industry need to have certain economies of scale before they can compete with the existing ones.