China丨Questions of Pyrethroid products answered by Yangnong in an investor activity

Recently, Yangnong Chemical organized an investor exchange activity,which main contents of the activity are as follows:

Q: Today, we saw a different chemical factory in Youjia, especially its environment and green area. So, what is the reason for the company to maintain investment in this aspect?

A: Modern chemical industry should be green and ecological. Actually, the construction of Youjia has gone through five stages: "leakproof plant", "no odor factory”, "no rust factory", "green factory" and "garden factory”. The main reason why the company attaches importance to the construction of plant greening is to create a working environment combining industrial civilization and ecological civilization for employees, to bring employees a pleasant experience, and to convey excellent pursuit of management ideas to employees.

Q:How is the company culture formed? And, how to strengthen the core competitiveness through corporate culture?

A: Yangnong's corporate culture is gradually formed after years of development and accumulation, with a strong culture of ownership. As a company with a long history, this year marks the 20th anniversary of Youngnon's listing. Twenty years ago, Yangnong only had a sales scale of about 200 million yuan. However, after the hard work of the old generation of workers, the scale of the enterprise continues to expand. These entrepreneurial journey and valuable spirit become the company's heirloom, also is Yangnong's cultural gene.

The company is committed to changing the future with innovation, beautifying life with chemistry, upholding the business philosophy of "responsible for customers, employees, shareholders, and society", and is determined to become the most innovative leading agrochemical company in China.

In the new era, under the guidance of the vision of "building the most innovative agrochemical company", the company will advocate the values of "innovation, entrepreneurship, responsibility, integrity and inclusiveness", keep the enterprise culture with the times, and stick to the nature of strivers.

Q: The price of the raw material for Pyrethroids has increased, Will the company's price for Pyrethroid be different?

A: In the first half of this year, the price of raw materials increased significantly, and the operating data of the semi-annual report also disclosed that the price of Sodium hydroxide doubled. Driven by cost, the market price of Pyrethroids was also increased. Although, Yangnong has a core competitive advantage, these products are priced in the market way. But we will develop different marketing strategies for the customers.

Q: What are the products that have been completed and put into production in of Youjia’s project? why do you choose the first batch of these projects to put into production? what is the current construction situation? How about the construction of the second batch of products?

A: The construction of the Youjia’s project started in December 2020. Due to the large number of projects to be constructed, the company will carry out construction in two stages according to the urgency of market demand. The first stage is to construct four projects, such as Difenoconazole, Mesotrione, Bifenthrin and Fluazinam, which have been completed in Dec 2021. The second stage is under construction and is scheduled to be completed by the end of 2022.

Q: In the first half of the year, the company achieved a performance exceeding expectations. Can we know the reason?

A: Yes, Yangnong’s first-half net profit rose 91% from a year earlier. We have two reasons. The first one is the impact of the industry cycle, the price of some pesticide products is higher than the same period last year. Another reason is that Yangnong actively dealt with the adverse impact of the epidemic. At that time, we have carried out timely closed management of our subsidiaries, so as to ensure the achievement of engineering construction and efficient management. These measures really contributed to a substantial improvement in business performance.

Q: Why the price of agricultural Pyrethrin dropped? What is the company's current sales and pricing model? Could you tell us something about Yangnong Pyrethrin products？

A: The company's Pyrethrin products are priced according to market prices. In the first half of the year, the prices of most pesticides fell is consistent with the fluctuating trend of chemical products. As for the Pyrethrin products of Youjia, it has a core competitive advantage because of the most abundant variety of Pyrethrin products, the most comprehensive technology and the longest industrial chain. We created Pyrethrin products by ourselves and master the core technology and a complete industrial chain; Therefore, our products are of good quality and have a good brand advantage in the market.

Q: How does the company manage Sinochem Crops, NovPharm and Agrochemicals R&D at present? With the continuous development of the company, how does the company plan for the future?

A: In view of the expansion, the company vigorously carried out the reform of management system and mechanism to adapt to the new situation, new challenges and new requirements. And the organizational structure of "one institute and four centers" has been formed. “The one institute" refers to the Plant Protection Research Institute, which is responsible for the R&D and innovation of the whole company. The "four centers" are marketing center, production and operation center, engineering center and QHSE center. Each center will be responsible for the corresponding work content to ensure high-quality development of Yangnong.

Q:What is the planning and production date of Huludao project?

A: The construction of the project is helpful to solve the bottleneck problem currently faced by NovPharm, and at the same time, it is conducive to the optimization of the company's production layout and the formation. The goal of the company is to build Huludao into a world-class manufacturing factory to undertake Yangnong’s projects. Now, the relevant process of the project has been completed. We will make an announcement at an appropriate time.

Q: What is the plan for new product promotion in the next 5-10 years?
A: The R&D cycle of new products is relatively long, it almost will take about 8-12 years to get the registration. At present, Yangnong focuses on the characteristics and needs of agricultural crops in China to accelerate the discovery and screening of new compounds..Some varieties have entered the registration trial stage, and new varieties are expected to enter the commercial stage after 2025.

Yangnong is mainly engaged in the research, development, production and sales of pesticide products. The main products of the company are insecticides, herbicides and fungicides. At present, the company has become a global production enterprise with core advantages in the field of Pyrethrin, and the number of pyrethrin products ranks among the top in the world.