On 6 June, Jiangsu Yangnong Chemical Co.,
Ltd. (Yangnong Chemical) unveiled its major asset purchase draft, with an
intention to purchase 100% of both Sinochem Crop Protection, Inc. and Sinochem
Shenyang Pesticide Research and Development Co., Ltd. from Sinochem
International Corporation (Sinochem International), a value of USD 133 million
(RMB 913 million), by cash. Notably, both Sinochem International and Yangnong
Chemical are controlled by Sinochem Group Co., Ltd. Shenyang Sciencreat
Chemical Co., Ltd is a subsidiary of Sinochem Crop Protection, Inc. which
mainly concentrates on the production and marketing of pesticide ingredients
such as mesotrione, imazethapyr as well as pymetrozine.
Yangnong Chemical has built long lasting partnerships with a number of international cross-border pesticide companies. As a result, the company itself is a strong competitor in the agricultural chemical industry. Sinochem Shenyang Pesticide Research and Development Co., Ltd. also owns a complete pesticide-oriented research institute, which focuses on the design of new chemical compounds, the development of production processes, the processing of pesticide formulations and bioactivity screening. After the reorganization, Yangnong Chemical will incorporate core assets of Sinochem International’s internal transactions of pesticide business, in order to form a more complete industrial chain with a system of research, production and marketing, and to diversify its product mix.
In terms of the acquisition made by
Yangnong Chemical, several questions have been raised. On June 24, Shanghai Stock Exchange issued a
letter covering sixteen questions of restructuring significant assets,
requesting Yangnong Chemical to respond to all the questions and doubts.
Despite the fact that Yangnong Chemical was investigated by Shanghai Stock
Exchange, many brokers think that the incorporation of assets has good future
Yangnong Chemical has a high expectation of
the asset acquisition with Sinochem International. Yangnong Chemical implied in
the program that through the acquisition, the listed company will develop
resources by incorporating Sinochem Shenyang Pesticide Research and Development
Co., Ltd. The production of the subsidiary of Sinochem Crop Protection and
global network resources will have synergetic effects with the integration of
businesses, products as well as employees. This will be beneficial for
improving the listed company’s strength of research and development, ways of
marketing and the diversity of pesticides, so that the listed company will gain
more popularity and have a larger influence in China and all over the world.
Jiangsu Yangnong Chemical Group Co., Ltd is an enterprise which produces pesticides, chlor-alkali as well as fine chemicals. Jiangsu Yangnong Chemical Co., Ltd. (Yangnong Chemical), controlled by Jiangsu Yangnong Chemical Group Co., Ltd, is the largest production base for pyrethroid, a late-model biomimetic pesticide in China. Yangnong Chemical was listed successfully in April 2002. Products such as chlorination products of nitrobenzene, epichlorohydrin, and pyrethroids for farm and health are in the lead in the market and are well known in the world. The amount of annual profit in Jiangsu Yangnong Chemical Group Co., Ltd is over RMB 350 million, and the company now owns three fine chemical industrial bases with complete equipment.
For more information about China’s chemical industry, please have a look at our resources at Chemicals.