CCM: Jiangsu Huifeng to extend into emerging industries for profit growth

  Source: Baidu

  Prior to these two, the company has extended into the pesticide E-commerce business, expanded product range and also launched production expansion projects.

  "At present, the overall pesticide market still maintains the downward trend and the competition among enterprises get further intensified. In this context, Jiangsu Huifeng is taking positive actions to boost financial performance and hunt for new profit growth,' an industrial insider commented to CCM.

  - To profit from capital appreciation

  
On 1 Aug., 2016, Jiangsu Huifeng made an announcement that it is to set up an investment platform named Yancheng Fenghui Industrial Investment LP (Limited Partnership), jointly with Yancheng Shengwei Investment Management LP, Chen Shihe, Zhu Wenming, Shi Wanyu and Xiao Jianzhong.

  
This new investment venture targets at promising and competitive industries, like healthcare and pharmaceuticals, sciences and technologies as well as intelligent manufacturing. Its registered capital will amount to USD26.56 million (RMB176 million), of which USD13.28 million (RMB88 million) will come from Jiangsu Huifeng, the limited partner. Initial funding will reached USD2.64 million (RMB17.50 million), and the remaining amount will be paid based on schemes of to-be-invested projects, deadline of full payment on 31 July, 2026.

  
"Through specialized management and market-oriented operation, this company will provide investment targets, or say, entrepreneurs, with outstanding financial services to facilitate their risk management, exchange business operation experience and realize rapid growth,' disclosed Jiangsu Huifeng, "Meanwhile, we can benefit from capital appreciation, which will improve our profitability and further business operation.'

  
"This is likely to be a new driving force behind Jiangsu Huifeng's financial performance,' said an industry insider, "The overall pesticide industry has been greatly affected by the global economic downturn: falls in revenue growth, weakening demand, low market prices of most products and intensified competition among enterprises. Moreover, domestic environmental regulations are getting further stringent. Given all these factors, industrial integration will be an irresistible trend.'

   - To further develop production technologies with foreign enterprise

  
On 2 Aug., 2016, American Vanguard Corporation (American Vanguard) announced that its wholly-owned subsidiary, AMVAC, has joined with Shanghai Focus Biological Technology Co., Ltd., subsidiary of Jiangsu Huifeng, to establish a technology R&D-focused joint venture in Hong Kong. Each party holds 50% shares in this new venture. AMVAC's Asia President, Lawrence Yu, will assume overall responsibility for the company.

  
This new enterprise, named Huifeng AMVAC Innovation Co., Ltd. (Huifeng AMVAC) will focus on technology transfer between the co-owners, including the development of new, proprietary agrochemical formulations and precision application systems for crop protection.

  
Through a series of joint service agreements, Huifeng AMVAC will provide a platform for the co-owners to leverage each company's technological capabilities. Additionally, each owner will benefit from the other party's established market experience in their respective home territories.

  Such deep understanding of diverse market segments in Asia and the Americas provides the owners with an outstanding foundation for continued international success. It is expected that this entity will grow through additive technology investments in upcoming years.

  
Heads of both companies showed great confident in this partnership.

  
Eric Wintemute, chairman & CEO of American Vanguard commented: "This new venture is a springboard for our strategic international expansion initiative. We have found Jiangsu Huifeng a highly successful, innovative technology-based, extremely well-positioned partner with which to pursue a mutually beneficial collaboration.

  Its president, Mr. Zhong Hangen has led his company to become one of the fastest growing, most profitable and dynamic agrochemical companies in China. He has placed a premium on innovative technology development and excellent marketing capabilities. I believe that this technology-focused joint venture will lead to a broader range of market access and coordinated supply possibilities that will allow both companies to truly expand their horizons.'

  
Zhong Hangen, president and founder of Jiangsu Huifeng agreed: "This venture will allow us to work closely with a successful crop protection company in the Americas market. AMVAC clearly has the skilled talent, manufacturing capabilities and product portfolio to contribute greatly to this partnership. With many tremendous growth opportunities globally, I look forward to seeing this venture expand and evolve with additional technology investments.'

  
"An additional funding of perhaps USD50 million is planned to be injected into a variety of promising precision application and proprietary chemical projects. We expect that such projects can proceed promptly and efficiently,' disclosed Zhong Hangen.

  This article comes from Fungicides China News 1608, CCM

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  Tag: pesticide