“If you want to keep up with the pace of the times and consolidate your market position, you must enter China.” Agrochemical giants hit the Chinese market

Although several years ago, transnational agrochemical companies still had some concerns about China's intellectual property protection, this hasn't stopped them from increasing their investments in the country. According to an article published by *Chemical and Engineering News* in the U.S., the continuous improvement of China's IP protection system, combined with the cost advantages of production and the growing demand for "green" food, has attracted more multinational agrochemical firms to enter the Chinese market. The article highlights that in the past, many active ingredients produced by Chinese agrochemical companies were often patented by foreign firms. For instance, DuPont invested $25 million in a plant in Shanghai in 1992, only to find its patented herbicide being replicated by another manufacturer. However, as China strengthens its IP enforcement, such cases have become increasingly rare. A global general manager at Degussa AG’s agrochemicals division stated that the issue of infringement is now largely manageable in China. He noted that without proper IP protection, large international companies would hesitate to enter such a vast market. “Compared to consumer goods, counterfeit agrochemicals are not a major problem,” he added, citing Syngenta’s recent legal victory in Nanjing as evidence of improving IP conditions. Degussa also supplies key intermediates to other agrochemical producers rather than selling directly to farmers. Recently, it invested in a cyanuric chloride production facility in Liaoning Province, which is used in agricultural chemicals and dyes. Looking ahead, more market opportunities are expected to open up, giving foreign companies even more reasons to invest. According to BASF, China is currently the sixth-largest agrochemical market globally, valued at $1.5 billion. While this is less than Japan’s third-largest market, it indicates strong growth potential as demand for agricultural products rises. As China’s economy grows, consumers are increasingly seeking "green" and healthy food options. Supermarkets in major cities source from reputable farms that follow national safety standards, and these farms also serve as export bases. In Hong Kong, Seoul, and Tokyo, produce from mainland China—such as tomatoes, apples, and lettuce—is widely popular. With its massive market size and low labor costs, experts believe China will become a major player in the global fruit and vegetable trade. BASF has already started selling its agrochemicals directly to large, reputable farms in China. Despite rapid growth, challenges remain. Many small-scale farmers lack education and use outdated, environmentally harmful pesticides. Newer, eco-friendly products tend to be pricier, but international companies are gradually introducing advanced solutions into the Chinese market. BASF recently launched its F500 fungicide series in China and confirmed it will not delay product launches due to IP concerns. The main driver for foreign investment, however, remains the rising competition from domestic Chinese firms. Degussa’s spokesperson noted that foreign companies must eventually enter the Chinese market to face local competitors. Red Sun Group, based in Nanjing, reported annual sales of $500 million, signaling the growing strength of domestic players. Multinational companies are expanding their presence through various strategies. For example, Sumitomo Chemical built a herbicide plant in Dalian in partnership with a Chinese firm, while Degussa’s Liaoning plant supplies intermediates to local manufacturers. Syngenta also completed a paraquat production plant in Jiangsu. BASF has held over 100 technical training sessions in China, and orders for agrochemical intermediates are on the rise. Dow and DuPont have also set up R&D labs in Shanghai focused on the Chinese market. In the words of Degussa, entering China is an inevitable choice: “If you want to keep up with the times and maintain your market position, you must enter China.”

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