In-Depth | Chinese Agrochemical Companies Going Global: From Breaking the Impasse to Leading the Way—A Microcosm of the Era of Manufacturing Globalization

Against the backdrop of profound adjustments in the global economic landscape and accelerating industrial transformation, China’s agrochemical industry is confronting unprecedented opportunities and challenges. In recent years, Chinese agrochemical exports have continued to expand, serving as a key driver of industry growth, while the sector’s share and influence in the global market have steadily increased. However, amid escalating international trade tensions, frequent market volatility, and increasingly stringent environmental regulations, the industry’s development trajectory has become ever more complex.

Looking across the “going global” journey of Chinese enterprises, they have not only achieved breakthrough progress in areas such as product‑mix optimization, technological innovation, and brand building, but have also demonstrated remarkable resilience and adaptability in expanding into overseas markets. Faced with the dual pressures of the anti‑globalization trend and intensifying global market competition, the question of how to transition from traditional production models to a strategy of high‑value‑added, globally integrated operations has become a pivotal issue for Chinese agrochemical companies seeking to advance toward high‑quality development. Drawing on data and case studies, this paper examines the export performance and international expansion strategies of Chinese agrochemical firms, while exploring their response tactics in the global marketplace and their prospects for future growth.

01

Both the volume and value of pesticide formulation exports have surpassed those of active ingredients, signaling the success of the export structure’s transformation.

China’s pesticide exports have become a core driver of the industry’s growth. Between 2011 and 2020, China’s average annual pesticide production reached 1.48 million tons, with cumulative growth of 13%, while average annual pesticide exports stood at 950,000 tons, expanding by as much as 35%. Globally, this robust expansion in Chinese pesticide exports has largely offset the contraction in domestic demand resulting from the “zero‑growth” policy for pesticides, serving as a crucial pillar for capacity expansion. In 2021 and 2022, the share of pesticide exports hit record highs, accounting for 85% of the nation’s total pesticide output. Even in 2023, despite an overall slowdown in the global agrochemical market, the export share remained as high as 84%, underscoring its pivotal role in supporting the industry (see Figure 1).

Figure 1. China’s Pesticide Production and Export Share, 2012–2023

From January to August 2024, China’s pesticide exports maintained their growth momentum. Data show that the volume of pesticides exported, expressed in 100% active ingredient terms, reached 1.33 million tons, up 34.2% year on year, while the export value totaled US$10.6 billion, a 3.4% increase over the same period last year. Despite the robust expansion in export volumes, pesticide prices continue to face downward pressure.

From the perspective of export product structure, in 2023, the export volume of active ingredients for pesticides, converted to 100% content, totaled 730,000 tons, while the export volume of formulated products, also converted to 100% content, surpassed that of active ingredients for the first time, reaching 820,000 tons. Both categories recorded export values of US$7.5 billion. This shift underscores significant progress in optimizing the product mix within China’s pesticide industry, with higher-value-added formulated products increasingly serving as a new driver of export growth.

From January to August 2024, this trend has continued. The export volumes of active ingredients and formulated products, converted to 100% active‑ingredient equivalents, reached 620,000 tonnes and 710,000 tonnes, respectively. Moreover, the value of formulated‑product exports, at US$5.7 billion, significantly outpaced that of active ingredients, which stood at US$4.9 billion. This not only underscores the Chinese agrochemical industry’s ongoing commitment to technological innovation and product upgrading but also highlights the strategic success of its shift toward higher‑value‑added offerings.

As environmental regulations become more stringent and market competition intensifies, China’s agrochemical industry is gradually shifting from traditional active‑ingredient production to the research, development, and manufacturing of high‑value‑added formulations, continuously enhancing product value and market competitiveness.

Looking ahead, as industry trends continue to deepen, China’s agrochemical sector is poised to capture a larger share of the global market. However, to achieve this goal, Chinese agrochemical companies must strengthen and expand their presence in international markets while moving beyond current business models. Specifically, firms need to shift from mere raw-material processing and sales toward building proprietary brands and investing in research and development—this represents the overarching direction of industry evolution.

02

Global market pressures are evident in corporate earnings; the pace of overseas expansion remains steady.

Although China’s pesticide export market has generally maintained a growth trend, persistently weak prices have posed significant challenges for pesticide companies, with many facing pressure from declining profits. In 2023, driven by inventory buildups in international markets and the concentrated ramp-up of global pesticide production capacity, pesticide prices plummeted, leading to a widespread halving of corporate net profits.

AgroPages conducted an in-depth analysis of the revenue performance of 28 domestic agrochemical companies listed on the stock market from 2021 to 2023, with a particular focus on their international expansion and the share of sales generated both domestically and abroad. Overall, these listed agrochemical firms exhibited steady revenue growth during this period, peaking in 2022. However, in 2023, 26 of them reported a decline in revenue. Key challenges faced by these companies included exchange-rate volatility, shifts in international trade policies, weakened demand resulting from channel overstocking and inventory buildup, and intensifying market competition. Exchange-rate fluctuations directly impact corporate profitability, particularly for firms with a high proportion of export sales. Changes in international trade policies—such as the rise of protectionism and anti-dumping investigations—have also posed significant hurdles to overseas market expansion. Moreover, the heightened global competition in the agrochemical sector in 2023 has prompted companies to continuously upgrade their technological capabilities and product quality in order to withstand competitive pressures from both domestic and international peers.

The pressure from the international market is particularly evident in the share of overseas sales within companies’ total revenue. Some firms, such as Runfeng Co., Ltd., Yangnong Chemical, Yingtai, Nantong Taihe, and Lier Chemical, have consistently maintained a high proportion of overseas business; meanwhile, domestic‑focused companies like Zhongnong Lihua and Xin’an Chemical are also steadily expanding their presence in overseas markets. Nevertheless, in 2023, the overseas sales share of most enterprises experienced fluctuations, with 26 out of 28 companies reporting a decline to varying degrees.

Figure: Sales Revenue and Domestic/International Sales Share of 28 Listed Pesticide Companies in China, 2021–2023

Note: Data are sourced from publicly available information of listed companies; sales figures encompass all business segments, including agrochemicals; for each company, the sales data are presented in descending order, covering the years 2021–2023.

Despite the challenges posed by the external environment, Chinese agrochemical companies have continued to advance their overseas market‑expansion strategies, proactively addressing a range of obstacles. By optimizing their product portfolios and tapping into emerging markets, these firms have maintained overall revenue stability.

In the areas of overseas market expansion and product registration, several companies have made significant progress. For instance, Runfeng Co., Ltd., Hailir, Guangxin, and others have completed multiple product registrations in numerous countries and regions, while also accelerating the establishment of overseas subsidiaries and proactively expanding their presence in international markets.

Some companies have increased their R&D investment in new agrochemical products. In 2023, Lier Chemical launched registration and market‑entry initiatives for glufosinate‑ammonium in multiple overseas markets, vigorously advancing its core product portfolio. Xinong Co., Ltd. is actively expanding its overseas zinc thiazole formulation business, focusing on key countries and major crops while deepening integration with high‑quality distribution channels. Hongtaiyang has accelerated the overseas registration of diquat dichloride, chlorantraniliprole, and glufosinate‑ammonium. Meanwhile, Xianda Co., Ltd. has conducted efficacy trials for its novel compounds pyrazquinoxyl and phenpropathrin across several markets, including Southeast Asia, Central and South America, and Latin America, and has already initiated independent registration efforts.

In the face of market challenges, companies have also been proactively enhancing their overseas marketing capabilities. Runfeng Co., Ltd. has launched the “Rainbow Leadership Program” to train its overseas management teams, while senior executives at Limin Co., Ltd., Changqing Co., Ltd., and other firms have personally led delegations abroad to conduct in-depth market research, providing robust support for expanding into new markets.

In managing exchange-rate risk, companies commonly employ financial instruments such as foreign-exchange hedging and forward contracts for buying or selling foreign currency, thereby locking in exchange-rate fluctuations and mitigating their impact on corporate profits.

Looking ahead, listed agrochemical companies will continue to face a range of opportunities and challenges in overseas markets. As global demand for high‑efficiency, environmentally friendly pesticides grows, firms that leverage technological innovation and expand their market presence are poised to further increase their share in the international arena.

03

From Disorder to Standardization, from Dependence to Innovation: The Evolution of Chinese Agrochemical Companies’ “Going Global” Strategies

Since China’s accession to the World Trade Organization (WTO), agrochemical companies have actively engaged in internationalization, gradually expanding from initial exports of active ingredients to diversified overseas strategies and deeply integrating into the value chains of foreign end‑user markets. Along the way, Chinese agrochemical firms have not only established a solid foothold in the global market but have also made significant strides in technological innovation, product upgrading, and market diversification.

For enterprises, going global is not merely about exporting products; it is also a crucial pathway to integrating into the global division of labor, enhancing international competitiveness, and strengthening their voice on the world stage. From the perspective of the global value chain, overseas expansion can be categorized into three types:

First is trade‑oriented international expansion, which encompasses product exports, the development of distribution networks, and OEM manufacturing. This currently accounts for the largest share of Chinese agrochemical companies’ overseas activities, yet it faces challenges such as price competition, market volatility, and weak brand recognition.

Second, there is investment‑driven overseas expansion, which encompasses cross‑border M&A, the establishment of production bases, and the development of R&D centers. Such initiatives entail significant risks and pose considerable management challenges, yet in recent years an increasing number of Chinese enterprises have been venturing into this space.

Third, globalized operations—encompassing end-to-end supply-chain integration, brand management, and the establishment of regional headquarters—demand that companies possess robust capabilities in strategic planning, organizational governance, and corporate culture development. This represents a dynamic competency that is built up over the long term.

Agrochemical companies pursuing overseas expansion through trade typically follow three main models: Model A is traditional export trade without registration; Model B is a trade model under formal registration; and Model C is a localized distribution model. These three approaches correspond to different stages of a company’s internationalization, with progressively higher demands on resources, operational capabilities, and commitment to investment, thereby reflecting an upward trajectory in the firm’s value chain. In recent years, through sustained investment, most Chinese enterprises have evolved into entities that proactively pursue independent overseas registrations and leverage patent strategies to establish robust technological barriers.

Of particular note is that several Chinese companies have successfully implemented the Model C approach overseas by penetrating end‑market channels and addressing the specific needs of local farmers, achieving remarkable results. For example, Kesa Jienong has cultivated a strong presence in the African market for many years; through the introduction of differentiated products and direct control over distribution channels, it has built a solid reputation in markets such as Nigeria and Cameroon, while continuing to expand into emerging markets like Ghana and Côte d’Ivoire. Meanwhile, Aikol Chemical has focused on Vietnam’s demand for resistance‑disease management and crop protection for high‑value cash crops, developing and promoting patented, eco‑friendly microbial products tailored to these needs. Following this success, the company replicated this model in the Indonesian market, establishing a business strategy driven by technology and services that directly address end‑user requirements. In addition, Zibo Ouxisi Agricultural Co., Ltd., in collaboration with the adjuvant manufacturer Qingyu Chemical, has developed rain‑resistant formulation products for Filipino farmers, effectively addressing the region’s unique cultivation challenges.

Helping enterprises acquire resources and gain control over value chains through M&A integration, as well as by establishing overseas production bases and R&D centers. In recent years, Chinese companies’ overseas investments have primarily taken the following four forms: resource‑oriented investments; market‑penetration investments targeting high‑end segments; capacity‑expansion investments; and supply‑chain investments. Moreover, Chinese firms have adopted a “nearshore strategy” by setting up production facilities abroad, with their finished‑product manufacturing bases now spread across Asia, South America, Africa, Europe, and North America—positions that are poised to serve as regional platforms, facilitating the entry of more Chinese companies into local markets.

Globalized operations represent the advanced stage of international expansion, requiring companies to establish a comprehensive end-to-end system spanning R&D, manufacturing, and brand management, while placing exceptionally high demands on strategic planning, organizational governance, and cross-cultural capabilities. Although this model entails substantial upfront investment and a lengthy implementation period, successful execution can deliver sustained competitive advantages and significant growth potential. At present, no Chinese agrochemical company has yet achieved fully globalized operations; however, Runfeng Co., Ltd. has taken the lead in embarking on this path, demonstrating industry‑leading vision and determination.

04

Manufacturing Goes Global

Looking ahead, the development trajectory of China’s agrochemical companies not only shapes the industry’s fortunes but also serves as a microcosm of Chinese manufacturing’s global expansion. Against the backdrop of a reshaping global value chain, Chinese manufacturers must shift from mere product exports to the export of technology, brands, and standards, leveraging investment‑driven overseas expansion and globally integrated operations to achieve deep integration into international markets. This requires not only sustained investment in R&D and product innovation, but also strategic foresight and practical capabilities in organizational management, cross‑cultural integration, and the efficient mobilization of global resources.

Overall, the development trajectory of China’s agrochemical companies has provided valuable lessons for the international expansion of the manufacturing sector. Looking ahead, as Chinese firms continue to make breakthroughs in technological innovation, brand building, and global market deployment, China’s manufacturing industry is poised to capture a larger share of the global market, achieving a remarkable transformation from “Made in China” to “Created in China” and “China‑branded.”

Source: AgroPages (World Agrochemical Network)