Selling Holding Share of Jiangsu Zhongbang , Nanjing Redsun Intends to Turn the Tide

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Publish time: 21st March, 2011      Source: CCM
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      (2011-3-21) On Feb. 16th 2011, Nanjing Redsun Co., Ltd. has confirmed to sell 47.92% share of Jiangsu Zhongbang (Jiangsu Zhongbang Pharmaceutical Co., Ltd.) to Nanjing NFP Group (Nanjing No.1 to Pesticides Group Co., Ltd.), which is about USD2.5 million. And it's reported by the announcement that the transaction between Nanjing Redsun and Nanjing NFP Group has already been signed since Dec. 30th, 2010. Is this one of the part of Redsun's restructure plan after Redsun announced that Nanjing No.1 Pesticide Group Co., Ltd., acquired 49% equity in Redsun Group from Redsun Group's 100% controlling shareholder of GCSAMH on March 2nd, 2007?

    

       

    

      Even though the transaction is over USD2.5 million capital injected into Nanjing Redsun, in fact, Nanjing Redsun's performance hasn't improved greatly after witnessed weak situation in 2010. According to Nanjing Redsun's 2010 annual report, Nanjing Redsun tumbled sharply by about 400% year on year in net profit to USD-1.8 million in 2010.

    

       

    

      As for Nanjing Redsun's total revenue in 2010, it achieved slight growth of 7.3% year on year to USD579 million. But this growth in revenue didn't result in net profit increase in 2010, because of accordingly rising cost. It's quoted in Nanjing Redsun's 2010 annual report that the weak performance is primarily caused by the aftermath of the financial crisis, globally abnormal climate, more expensive material, exchange rate appreciation of RMB against USD, and negative influence of some policies such as the abolishment of glyphosate export rebate and so forth.

    

      
      Pyridine is an important chemical intermediates to pesticide like paraquat, diquat, Chlorpyrifos, Imidacloprid and others. With its high efficiency, low toxicity, and bio-compatibility, in line with the development requirements of pesticides and trends, Pyridine pesticide becomes the world's fourth-generation new pesticides.

    

       

    

      As the only one domestic producer of pyridine, Nanjing Red Sun also produced paraquat. Though the market is not yet clear, Nanjing Red Sun enhances its pyridine-pesticide chain at its best capacity.

    

       

    

      Faced the situation, Red Sun has taken measures. What will Redsun do next to turn the tide? Where is the way out?

    
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