Pilarquim: Exports Key To Oversupply
29 January 2009 What is the biggest challenge for your business in this macroeconomic environment?
Recently, highly toxic pesticides have been prohibiting production; additionally, the increase of production cost and environmental protection supervision has depressed the profit of pesticides. But in domestic markets, supply exceeds demand. The large production of pesticides must transfer to world markets. Agrochemical exports can remedy excess inventory. Under the globalization trend, Chinese agrochemicals have the widest profit margin when they compete internationally because of access to cheap labor, low environmental cost, and low raw material cost.
How are you changing your operations to better serve your clients in these tough times?
Pilarquim is aiming for further growth by strengthening brand awareness, market penetration and distribution networks. Apart from our headquarters in Canada, we have successfully branched out globally to four major continents, including establishment of regional offices in São Paulo, Brazil; Guadalajara, Mexico; Uzbekistan, Central Asia; Moscow; and Warsaw, Poland.
We are determined to bring a strong emphasis on the brand image among global leading suppliers. Our operations are oriented toward long-term values and competitiveness with our customers and partners, seeking potential opportunities and accomplishing goals by open dialogue and strategic approaches to interlink diversified global networks.
What is your most innovative product, service or research initiative?
Our R&D is working at the forefront of innovations from North America, offering enormous potential for developing new products and businesses. To advance our skill sets, we further expand our territories to collaborate with leading universities and partners worldwide to capture new ideas into potential formulations.
Built on the strong fundaments of ISO 9001,14001, OHSAS 18001, ISO17025 CNAS, Pilarquim successfully exploits the vast resourceful land of China and strictly monitors each manufacturing process, ensuring the sustainability of our production processes and performance, as well as keeping cost-effective competitiveness, helping ourselves to fully achieve our self-established standard.
How optimistic are you about the economic health of the agrochemical industry for 2009?
Due to the growth of the world population, demand for food, energy diversification into biofuels, the limited availability of land, and adverse climatic factors, the outlook for agrochemical companies is expected to hold up better than the overall chemicals industry in the current global economic slowdown.
In 2008, a supply and demand imbalance occurred in agricultural markets when demand exceeded production for key crops in global markets, and market prices reached record levels. This puts farmers under extreme pressure to optimize their yield and encourages the use of fertilizers and crop protection products. Agrochemical companies benefit from the significant increase in crop protection products.
2009 will be a difficult year; although we foresee agrochemical trends in volume unlikely to worsen, industry’s pricing power is weak as a result of decreasing demand vs. further supply. The complications lie upon the price deflation through most of the chemicals chain. We expect the first quarter of 2009 to reach the lowest point in this cycle as customers anticipate this weakness and clear inventories aggressively, but we see a possibility for an upside during the second half of 2009 as demand prompts manufacturers to boost inventories.
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