Lier Chemical: Net profit of USD 77.7 million in H1 2021, up by 97.7% YoY

Lier Chemical Co., Ltd (Lier Chemical, China’s largest glufosinate-ammonium manufacturer at present) issued the semi-annual report 2021. During the reporting period, the company achieved operating revenue of USD486.3 million and net profit of USD77.7 million, representing an increase of 34.5% YoY and 97.7% YoY respectively.

Main products of Lier Chemical include:

◇       Organophosphorus herbicide: glufosinate-ammonium

◇       Pyridine herbicides: clopyralid, picloram, fluroxypyr, triclopyr, clodinafop-propargyl and aminopyralid

◇       Urea herbicides: diuron, linuron, fluometuron, chlortoluron, isoproturon, tebuthiuron, bensulfuron-methyl and halosulfuron-methyl

◇       Amide herbicides: mefenacet, napropamide, and propyzamide

◇       Other herbicides: flumioxazin and oxadiazon

◇       Triazole fungicides: epoxiconazole and iprodione

◇       Intermediates: 2-methylpyridine and 2,2'-bipyridine

◇       Pesticide formulations

Table : Financial performance of Lier Chemical, H1 2020, H1 2021 (million USD)

          Source: Lier Chemical

In H1 2021, the demand for glufosinate-ammonium continued to improve, and Lier Chemical's performance increased significantly. According to market information, in H1 2021, the average ex-factory price of glufosinate-ammonium (95% TC) was USD295.5/ton, up by 25.4% YoY and 20.3% QoQ. Benefiting from this, in H1 2021, company's revenue of pesticide technical business increased by 36.44% YoY and the gross profit margin increased by 2.89%.

With the launch, promotion and application of new glufosinate-ammonium-resistant gene products developed by multinational companies in recent years, and the ban on products such as paraquat and dicamba in foreign markets, the market demand for glufosinate-ammonium is expected to further improve, and the company's profitability is expected to continue to increase.

Lier Chemical has used its own technological advantages to master the key technology of glufosinate-ammonium synthesis, and has now become the largest glufosinate-ammonium production enterprise in China. At present, the company has a capacity of 15,400 tons of glufosinate-ammonium, of which the Mianyang base has production capacity of 8,400 t/a, and the Guang'an base has 7,000 t/a (another 3,000 t/a capacity is under construction).

In order to further enhance market competitiveness, Lier Chemical has developed glufosinate-p. The company plans to have 3,000 t/a and 20,000 t/a of glufosinate-p production capacity in Guang'an and Mianyang bases respectively, of which the 3,000 t/a glufosinate-p production capacity at Guang'an base is expected to reach in January 2022.

Industry experts predict that the performance of glufosinate-ammonium in H2 will continue to be promising. The current trend of rising prices of glufosinate-ammonium is still obvious. The average price in July reached USD35.2 thousand/ton, and the average price in August rose to USD35.7 thousand/t, which is higher than the average price of Q2, up by 22-23%. It is expected to maintain a high boom in H2, and the company's gross margin is expected to further increase.

While increasing the production of glufosinate-p, Lier Chemical has further laid out new production capacity of cyantraniliprole, chlorantraniliprole, thiabendazole and nicosulfuron, which will add new profit growth points for the long-term development of the company.