Chapter 456 Jealousy
Antitrust investigations are the last obstacle to mergers among giants.

Although anti-monopoly is often a toy of capital, it has to be admitted that it still has some effect.

This survey is not limited to the United States, but also in other countries, including Brazil, Argentina, China, India...

So in order to cope with the investigation, the merged giants need to sell some assets.

For example, in order to appease the Chinese market, Monsanto sold Seminis Seeds to Sinochem.

This is part of the game.

In fact, the impact on Monsanto is not that big, because Syngenta is also a giant in the vegetable seed industry.

But all this made Ren Jianxin of the Chemical Group feel sick.

Missing out on Syngenta was inevitable, and he had hidden his feelings of failure.

But how come Sinochem took over Saint Nice Seed Industry without much effort?

However, after working hard for several months, the chemical group ended up with nothing.

The China National Chemical Corporation and the Sinochem Group can be said to be twin brothers. They have many similarities, but also many contradictions.

Comparison, jealousy...

There is a saying on the Internet that people are afraid that their brothers are not living well, and they are also afraid that their brothers are driving a Land Rover.

I laugh at you for not having it and hate you for having it.

Ren Jianxin has this mentality now.

The domestic chemical market has also become saturated. China National Chemical Corporation and Sinochem are now in a competitive relationship. Even if there is no acquisition of Syngenta, the two will merge in the future.

It's just a question of who is in charge.

"In that case, let Chemical Industry take over Sinochem. You're going to retire soon anyway."

Ren Jianxin had a gloomy face. In front of him was a document about China Seed Group's acquisition of Saint Nice Seed Industry.

The chemical group-led acquisition of Syngenta failed, but Sinochem has been growing stronger little by little.

Ren Jianxin was known as a merger and acquisition maniac and had left a deep impression on the management of many state-owned enterprises. However, he could not tolerate the fact that he had become a stepping stone for Liu Deshu in this game.

After pondering it secretly, he made up his mind.

After a while, Professor of Agricultural Economics Lin Song came to his office.

"Mr. Ren, what's going on this time?"

Ren Jianxin glanced at him and suppressed his dissatisfaction with Lin Song in his heart. Some things still needed to be discussed by him.

"You're okay like this... right?"

Lin Song smiled and said, "Don't worry, Director Ren, I will definitely get it done this time."

"hope so."

Under Ren Jianxin's arrangement, Lin Song soon appeared on another economics program.

On the show, Lin Song explained in detail the impact that the transformation of the six giants into four giants will have.

It believes that the existence of the Big Four will further squeeze the living space of related domestic companies.

Even if Bayer and BASF had not merged, the two companies would have been larger.

Bayer, which focuses on agricultural chemicals, had a market value of more than US$900 billion before the integration, and the recent integration has caused it to rise slightly.

The same is true for BASF.

The size of the two is no smaller than that of the merged DowDuPont and Monsanto.

in the country, no company can compete with the Big Four, and the domestic agrochemical market is likely to collapse.

At the same time, Lin Song also expressed regret that the chemical group failed to participate in the acquisition of Syngenta.

Once upon a time, their hopes were high.

Their bid is no lower than Monsanto's. Syngenta also covets more domestic market. After the chemical group acquires Syngenta, it can also develop better by relying on the domestic market.

In addition, Syngenta also possesses a variety of advanced technologies.

In short, Lin Song described missing out on Syngenta as a huge regret.

With Syngenta, domestic food production will no longer have to worry about the consequences, and it will also stand at the pinnacle of the world's agrochemical industry.

But now, the country needs to first think about how to deal with the impact from the four giants.

He believes that the mergers and acquisitions of giants are just the beginning, and the country also needs to integrate powerful companies and forces.

There are too many agricultural chemical and seed companies in China, a total of seven or eight thousand small and medium-sized enterprises, which are like a pile of loose sand. When faced with the impact of the giants, they have no power to fight back at all.

It is inevitable to encourage integration and mergers and acquisitions.

But this alone is still not enough, the country also needs giants in the agricultural chemical industry.

One of the ways is to merge influential companies. Lin Song mentioned China National Chemical Corporation and Sinochem, as well as Jiahe.

"The investment in pesticide technology research and development is huge and the risks are high. Without strong and advanced technology and strong capital as a backing, it is very difficult to gain a foothold in the world. Small companies cannot survive, and large companies can only survive through mergers and expansions."

“I know some people are going to mention Quanwang Biotechnology and Jiahe again. Biological pesticides are indeed a great attempt, and Quanwang Biotechnology is indeed the best among them. Quick Kill, Green Cut and New Leaf have also changed the way many farmers apply pesticides.

But it is still a niche product, and its annual sales are less than 20 to 30 billion, which can only be said to be a drop in the bucket.

In addition, according to statistics from international organizations, it takes an average of 9.1 years to develop a new active ingredient for pesticides from the beginning of research and development to industrialization, and the research and development costs reach US$2.1 million.

The biggest advantage of R&D-based enterprises is that they can obtain exclusive production rights during the protection period by relying on product patent protection, thereby obtaining huge monopoly profits. After the patent protection expires, the technical level of these enterprises' products will still be higher than that of textile enterprises, and their product gross profit margin will also be higher than the industry average for a long time.

At present, except for Monsanto, the R&D expenses of new pesticides of the other five giants account for about 7% of their sales.

But even so, the high investment and high risk make it increasingly difficult for the six giants to bear.

While existing innovative pesticide products around the world continue to lose patent protection, the pace of new drug launches has slowed significantly.

This eventually led to the merger of the six giants.

In fact, this is not the first time this has happened. During the low point of the pesticide industry in the late 90s, through a series of asset restructuring, only six of the world's ten largest pesticide companies remained.

Now it has just changed from six to four.

Omni-King Biotech just got lucky and discovered a new active ingredient from plants, but can this last?

The discipline of botany has been developed for hundreds of years, and the research on biological components has accumulated for decades abroad. It is extremely difficult to find new ingredients!
Moreover, due to the existence of pesticide resistance in crops, any pesticide has its use cycle, and the demand for pesticides cannot be met by patented products alone, so there are the four little dragons of generic drugs.

Once Quanwang Bio's research and development of new biological pesticides cannot keep up, it will be buried in the dust of history!

DuPont, Syngenta, BASF and others have been deeply involved in the domestic market for more than 20 years. Although they do not have a price advantage, they have occupied the domestic mid-to-high-end pesticide market with their environmentally friendly, high-quality products and patented pesticide varieties.

In the past 20 years, BASF’s cumulative investment in China has exceeded 20 billion euros. In the next 3 to 4 years, BASF will invest another 20 billion euros in the Asia-Pacific region!
BASF is just one example.

There is also the well-known merger of Dow and DuPont and Monsanto's acquisition of Syngenta. They all set their sights on the domestic agrochemical market.

Therefore, we need our own agrochemical giants to protect food security. Biopesticides cannot bear this responsibility, and among agrochemical companies, only China National Chemical Corporation and Sinochem Energy have such strength! "

Lin Song's remarks are beyond the reach of ordinary people, but they have attracted widespread attention in the agricultural chemical circle, created some panic, and raised concerns about food security.

Guo Yang also saw Lin Song’s speech, and it was not surprising that Jiahe was included in it.

But it was obvious that what he wanted to convey was the merger of Sinochem and Chemical Industry. After thinking for a moment, he called Liu Deshu. "Mr. Liu, it seems that Sinochem has become the prey this time?"

“Whether you are the prey or the hunter is not up to the chemical group to decide.”

In a bright office, Liu Deshu was also watching Lin Song's speech, feeling a little disdainful in his heart.

"The performance of the chemical group in the past two years has not been good, so it can only resort to some unsavory means."

Guo Yang smiled and said, "Sinochem is actually thriving. It seems that even if there is a merger, Sinochem will be the dominant one."

Liu Deshu said: "But I will retire in two or three years at most."

The merger of two state-owned enterprises, even though both were within the system, was not easy, and one or two years passed quickly.

Liu Deshu is facing retirement, so who among the other candidates has the best chance?
Of course it’s Ren Jianxin from Chemical Industry.

Guo Yang naturally dislikes Ren Jianxin, not only because he led the acquisition of Syngenta, but also because of potential conflicts.

Jiahe and Sinochem also have business conflicts, but Liu Deshu is not possessive and prefers to cooperate for mutual benefit.

Ren Jianxin is more like a capitalist.

Guo Yang understood what Liu Deshu meant. "If he takes over, it is hard to predict what the future of the cooperation between Jiahe and Sinochem will be like."

"But there is still time, enough time to achieve a lot."

"Is there anyone chosen?"

Liu Deshu said: “Yes.”

"Golden Harvest will maintain cooperation with Sinochem in the next two years."

"Have a heart."

Having stayed in this position for so many years, Sinochem has left many traces of his, and naturally there are people he wants to push up.

It's just not easy.

Having good performance is naturally a help, and Jiahe's biodiesel and the development of overseas pesticide markets are both markets with great growth potential.

As soon as the merger news came out, Guo Yang called, which made Liu Deshu feel a little bit of cooperation.

After Lin Song, others also began to exaggerate the power of the four giants, as if the global agricultural chemical market was monopolized by the four giants.

The domestic capital market is also filled with pessimism, and the phenomenon of OEM by agrochemical companies has been mentioned again.

More than 100% of the top 90 domestic pesticide companies are OEM factories, and Syngenta accounts for to of them. Now all of these companies belong to Monsanto.

In the competition of the pesticide industry chain, domestic enterprises are relegated to the low end, while Monsanto and Syngenta are at the top of the profits.

A typical example is that due to the impact of the financial crisis, BASF's sales last year fell by about 30% year-on-year, but its agricultural solutions division performed strongly, with sales increasing by 21% year-on-year.

This phenomenon also occurs in giants such as Bayer and Syngenta.

This gives the giants greater ability to resist risks.

However, even so, DowDuPont, Monsanto and Syngenta eventually merged due to performance pressure.

Amid the global financial crisis, China's rural areas, agriculture, farmers and agricultural product markets have remained quite stable, which has attracted the attention of the world.

But this cannot change the reality that domestic agrochemical companies are weak.

It has to be said that Ren Jianxin is very good at choosing timing and Lin Song is very provocative, which has won them a lot of support.

It also prompted many people who previously supported the acquisition of Syngenta to stand up.

Mellon is such a person. He is a reporter for the Beijing News and is known for his investigative journalism.

He has long been a supporter of the chemical group's acquisition of Syngenta, which would be a move to change domestic agriculture.

During this period, he also wrote several articles, but was attacked by opponents who listed one by one the "crimes" committed by Syngenta in areas such as GMOs and paraquat.

But he believes that this is a necessary sacrifice on the road to revolution and that genetic modification is also a trend.

However, the voices of opponents grew louder and louder, and he finally gave in, but he is also conducting further research.

However, since Monsanto was the first to sign the contract, the results of his work had to be kept in a cabinet and gather dust.

However, things changed after the hearings on the giants' acquisitions and mergers.

The six giants in the agrochemical industry have become four giants, and agricultural economics expert Lin Song has come out to emphasize the crisis in the agrochemical industry.

As for the merger of Chemical Industry and Sinochem, Mellon doesn't care much about it. He cares more about the "sense of crisis".

This made him feel good.

"What a bunch of fools! Wouldn't everything be fine if they had supported the acquisition of Syngenta earlier?" Mellon cursed, but he felt relaxed and proud in his heart.

This made him feel that his previous article was very prescient, but it was a pity that no one mentioned it.

So he decided to write another article, which was about his experience of visiting Europe. Only he knew how powerful Syngenta was.

No matter how the industry changes or how the media exaggerates it, it will not affect the arrival of spring plowing.

What 'Big Six' or 'Big Four', it seems that they have nothing to do with farmers.

They only know that when the season comes, they have to start sowing, and turning the soil, preparing seeds and fertilizers have become the most important things at the moment.

This is also the busiest season for agricultural supplies sales.

Zhao Hua came to the mountain city again.

This area is mainly mountainous and hilly, with extremely undulating terrain, which means that the mountain city is still dominated by household agricultural production, especially vegetable cultivation.

Farmers buy small quantities of seeds and prefer cheap ones.

This made Ronghua Trading Company, which was accustomed to the big-business model in Shandong Province, extremely uncomfortable.

But there is no way. The competition in coastal areas is becoming more and more fierce. As a lower-level distributor of Tianhe Seed Industry, we not only have to face other brands, but also have to face the "oppression" of Tianhe.

Besides, Tianhe has more than one sales channel, Ronghua. There is also Denong agricultural supplies. Ronghua has Tianhe brand seeds, which Denong also has. The two parties can only compete in technical services.

The living space of major agricultural provinces is getting smaller and smaller, and Ronghua can only expand to the west.

For example, in a mountain city, to Zhao Hua, even a mosquito leg is still meat.

Moreover, after two or three years of hard work, Ronghua Trading Company has gradually gained a foothold in the mountain city, and the local large-scale production of vegetables is also being rapidly promoted.

Ronghua Trading has several more regional market developments like Shancheng.

All in all, Ronghua Trading's revenue is actually not low, and it is second to the top among non-listed seed companies.

Zhao Hua walked into the sales point of Ronghua Trading in Nanping Seed Market. In the window near the main entrance, there were three rows of vegetable seeds.

These are all Tianhe varieties.

Each variety is sold at several times or even more than ten times the price of local varieties. It has always sold well in coastal areas and has now opened up the market in mountain cities, with annual sales growth of more than 30%.

It was already past five in the afternoon and there were no customers in the store. Only the store owner was sitting in a chair behind the counter, reading a newspaper. He was reading very attentively with his brows slightly furrowed.

"Boss Tao, how's business lately?"

(End of this chapter)