According to the Implementation Measures of Hainan Province Pesticide Wholesale and Retail Business License Management Regulation (Trial) (Implementation Measures for short) released on 24 June 2011, pesticide wholesale enterprises and retail enterprises should submit written application to Hainan Ministry of Agriculture for attending the open bid of pesticide business licenses in Hainan Province, according to CCM’s latest issue of Crop Protection China News.
As government will eventually confirm the enterprises which will be granted pesticide business licenses within Aug. 2011, so far the pesticide companies in or out of Hainan Province are busy preparing their written applications, including state-owned enterprises, private enterprises, etc.
It is set by Implementation Measures that till 2013, there will be no more than three pesticide wholesale enterprises left in Hainan Province with registered capital of over USD15.2 million. As for pesticide retail enterprises, the maximum number is set to be only 205 in the whole island and the registered capital of the retail enterprises should not be less than USD152,000.
Some large state-owned wholesale enterprises in Hainan Province own the capability for the bid of pesticide business licenses.
Hainan Agricultural Production Materials Co., Ltd., founded in 2008, is a large state-owned enterprise with registered capital of USD15.2 million. It is considered to be the biggest agricultural production means supplier in Hainan Province with 35,000 m2 warehouse and two provincial distribution centers.
Haiken Agriculture Materials Co., Ltd., a large stated-owned enterprise, founded in June 2011 with registered capital of only USD310,078. It increased registered capital to USD15.2 million in Jan. 2011, aiming to enlarge its market share of agricultural materials in Hainan Province.
With the advantages of state-owned background, some insiders in Hainan Province believe that the two companies mentioned above are considered to be the default winners of the pesticide business licenses bidding.
Some other large companies that own the abilities to bid for the pesticide business licenses confirmed to attend the open bid, such as Hainan Agriculture Technology 110 Co., Ltd. (founded by Science and Technology Department of Hainan Province), Grand Agriseeds Technology, Inc., a listed seed company in Hainan Province, etc.
In terms of small and medium size pesticide wholesale enterprises which are unwilling to lose their business in Hainan Province, some of them have held together and co-founded a company to bid for pesticide business licenses.
Despite these enterprises in Hainan Province are bidding for pesticide business licenses, a large state-owned enterprise from outside Hainan Province, namely SinoChem Corporation (SinoChem), unexpectedly announced to attend the bid. Therefore the involvement of SinoChem makes the situation more complicated.
"We are not only eyeing the sales in Hainan Province but considering the changing pesticide marketing channels there. If the pesticide business license system is successfully promoted in Hainan Province, other provinces in China may be affected, thus our market distribution maybe somewhat affected as well," says an insider from SinoChem.
It is still hard to predict the final list of the companies that will get pesticide business licenses. But it is clear that the promotion of the policy would face lots of blocks in the near future. Hainan Government will require those companies which have got pesticide business licenses to solve the remaining problems after the withdrawal of unqualified companies, such as massive unemployed population, inventory problems, even credit and debt concern.
So far, the implementation of Implementation Measures still encounters lots of difficulties. Many pesticide dealers blame that the government carried out the new policy without seeking opinions from the public. Additionally, governments from all levels in Hainan Province hold different opinions on many parts of the policy according to their local conditions. Thus, many people in Hainan Province still believe that the new policy's implementation can't be finished at the end of 2011. Moreover, the change of Hainan Government in H2 2011 has offered a good excuse for the delay of implementation completion.


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