Jiuding Capital Invested RMB 70 Million Yuan in Huifeng Agrochemical
Investment Management Co., Ltd. has made another investment. Its affiliated fund, Xiaqi Jiuding Fund, invested RMB 70 million yuan in Jiangsu Huifeng Agrochemical Co., Ltd. (“Huifeng Agrochemical”). As a result, agriculture and its correlative sectors have become the focus of capital again.
To be listed next year
Situated in Yancheng, Jiangsu Province, Huifeng Agrochemical is a provincial start enterprise and a leading agrochemical enterprise in China. It mainly specializes in manufacturing pesticides for genetically modified crops. It has come out in front of this sector in China. Based long-term cooperation with multinational companies, it has made its production of prochloraz, bromoxynil and other pesticides on the top of the list in Asia. Therefore, it has become a hidden champion of the pesticide industry. In 2007, its revenue exceeded RMB 400 million yuan. It is expected that its revenue will be more than RMB 1 billion yuan in 2008, indicating that it will grow rapidly.
Yifei REN, project leader of Jiuding Capital, said to the reporter, “We have made contact with and investigation on many pesticide enterprises. At last, we targeted Huifeng Agrochemical. Under the leadership of president Hangen ZHONG, Huifeng Agrochemical has grasped the opportunities for the agriculture and president industry, and has got obvious competitiveness in some special fields. We have great confidence in their products, customers and development potential.”
As the reporter asked repeatedly, Hangen ZHONG revealed his ambition and said, “The pesticide industry is facing great development opportunities. However, at present, the financing channels for us are not smooth. If we only depend on our own capital accumulation, we will see a very slow development and can’t keep up with the changing market. We plan to issue A-shares in 2009. We will spare no effort to grow into a transgenic pesticide manufacturing company integrating R&D, manufacturing and sale as a whole and having strong international competitiveness.”
PE believes that the agriculture-related sectors look to further increase
Jiuding Capital, as a China-based PE enterprise, manages multi-PE funds which have invested in many enterprises such as Goldcup Electric Apparatus, Billions Chemicals, Linoya Electronics and Sanchuan Juice. Under our assistance and support, the enterprises we have invested have seen a substantial growth in their revenue and profit. Some of them have been listed. Jiuding Capital has taken initiative to contact with Huifeng Agrochemical and other agriculture-related enterprises since the end of the last year.
Jiuding Capital has always adhered to the basic investment principle of “Choosing the promising industry first, Selecting enterprises to be invested carefully”. Xiaojie HUANG, president of Jiuding Capital, said to the reporter, “Against the global inflation, the agriculture-oriented investment projects have shown their obvious advantages in maintenance of value. Besides, the investment market hasn’t understood the agricultural resource attribute well. We all know that mineral products and brand consumer goods are rare resources. Agricultural products are relatively rare resources, too. That is essential for us to turn our investment direction to the agriculture-related industries.”
Considering that there are dozens of agriculture-related industries, we’ve locked our eyes on the pesticide industry after repeated investigation and demonstration. Agricultural investment has direct impact on development of the pesticide industry. Global agricultural product prices have been weak for a long time, which has produced negative influence on growth of agriculture-oriented investment. As a result, the pesticide industry hasn’t made any progress. However, such situation has thoroughly turned around. Agriculture will be a long-term focus of investment as the whole world is facing food shortages. Therefore, the pesticide industry will enter into a longer boom cycle.
Compared with other agriculture-related sectors, China’s pesticide industry will be subject to many aspects such as policy, technology and money. Currently, the pesticide industry is concentrated so lowly that it still has much space to develop, grow and gain profit, which drives us to decide to focus this industry.
According to information, Blue Ridge Capital, together with KPCB China Fund, has just invested 30 million dollars in Jiangxi Tianren Ecology, a biopesticide company.