CEO Andisu: To expand production to consolidate China's market share.

OA_show ('533');Andesu is currently considering finding a new location for a new factory in China to maintain its market share by expanding productionWith domestic methionine producers concentrating on the release of production capacity in 2016, Andesu faces the challenge of competing for market sharekgmCaixin (Reporter Kaixi Huang) kgmin the past long time by overseas companies monopolized, Chinese enterprises difficult to break through technical barriers of the methionine industry, China's chemical enterprises are gradually through overseas acquisitions, independent research and development of the way to obtain market positionkgmoverseas assets acquired by China Chemical's Blue Star Group in 2005, currently generate 32% of sales from Europe, the Middle East and Africa, 18% from Central and North America, and 14% of the Chinese marketIt dominates the methionine market in ChinaHowever, with the domestic methionine manufacturer's production capacity released in 2016, and the subsequent production of 50,000 tons/year of methionine projects by Ningxia Ziguang, Weifang Xin and Cheng, and the challenge of later competing for market share, Jean-Marc Dublanc, general manager of Blue Star Andes, and Gu Dengjie, deputy general manager, told Caixin that the company is considering finding a new factory site in China to maintain its market share by expanding productionkgmcurrently expands production at its Nanjing plant in China to 140,000 tons/yearAccording to dongxing Securities research, by the end of 2015, including the Nanjing plant, Andesu's methionine production capacity at four major production sites worldwide was 430,000 tons/yearkgmmethionine is an essential amino acid in animals, but can not be synthesized in animals, need to be ingested from food, methionine added to the feed, can save 40% of the feedDue to the complexity of industrial production processes, high technical barriers, and the production process by safety and environmental protection of strict supervision, so the industry presents a highly monopolistic market pattern Over the past decade, the global methionine market, Evonik, Andesu, Noviandand and Sumitomo, four companies accounted for more than 90% of the methionine market, with the first three accounting for 37%, 27% and 20%, respectively Methionine products have a considerable monopoly profit, gross margin can reach 50% kgm The road to overseas acquisitions of Chem China was launched in 2005 and is based on overseas acquisitions of six of the company's major business segments, namely, new chemicals and specialty chemicals, basic chemicals, petroleum processing, agrochemicals, tire rubber and chemical equipment After Methionine, the world's second-largest company, France's Andesu became the first acquisition target, ChemChina has since acquired agrochemical company Maxim Agam, Italian tire maker Pirelli, German rubber moulding machine maker Klaus Mafy, and in 2016 announced a $43 billion offer to buy Swiss agrochemical and seed maker Syngenta, which received widespread market attention kgm to place the acquired overseas assets in its listed companies, is the main idea of China Chemical to integrate the acquisition of assets Among them, Blue Star New Material (600299.SH), Fengshen (600469.SH) and Shalonda (000553.SZ) have become the gateway to the domestic listing sauc, Pirelli and Maxim Agam (later renamed Andaumai) Andesu management said ChemChina's main role was strategic investors and retained the company's original management kgm reporter: In addition to Andesu, China's own methionine manufacturers in the past two years are also actively expanding production capacity, will they worry about the future may be the situation of oversupply? How to evaluate the current market demand for methionine?kgm Gu Dengjie: China's total production of commodity feed in 2016 is about 200 million tons, but in animal protein production, i.e various meats, pork, chicken, beef, aquatic products, eggs, dairy products and so on, the total output is also about 200 million tons, these two figures are not matched, that is, a ton of feed can not produce a ton of animal protein According to the domestic feeding level, to achieve such animal protein production, the need for feed is about 500 million tons to 600 million tons, which means that there are 300 million to 400 million tons of feed is still deindustrialized, which is an important factor driving the growth of the market demand for feed additives So this is why China's methionine market is growing much faster than the world, the current global methionine market demand growth rate of about 6%, China is about 10% kgm reporter: Some time ago it was reported that and Su Nanjing factory suspended quotations and orders, intended to digest production capacity, the current situation?kgm Jean-Marc DuBron: It's just a small incident and we're back in business in two weeks In fact, in the past period of time, we sold more products than we thought kgm Gu Dengjie: The company's procurement, production and sales are carried out in accordance with the plan But sometimes there is a lot of volatility in orders, and if it fluctuates a lot, we adjust the pace of sales In addition, Andesu because of the market leadership position, we are responsible to the market and customers, but sometimes there will be some market speculation, we have to take measures to curb market speculation kgm Reporter: In addition to the Spanish plant under construction, does Andesu have plans to continue to expand production capacity?kgm Jean-Marc DuBron: Andesu currently has a 27% share of the global methionine market, and in order to secure such market share, Andesu's capacity will grow at the same time as global demand growth of 6% to maintain its customer base , the expansion of the methionine plant, from planning to construction to output, takes a considerable amount of time, depending on the degree and size of the plant integration, it may take 2-5 years to achieve commercial production We do have new production expansion plans, and in China, we are currently looking for new locations around Shanghai kgm reporter: At present, Andisu Nanjing plant methionine mainly exported to which countries and regions?kgm Jean-Marc DuBron: Last year about 46%-47% of sales at the Nanjing plant were for export Andesu has two major production platforms in the world, namely Europe and China, Europe's production platform mainly supplied to Europe, Africa and the Americas, Asia's production platform mainly supply Asia and Asia Pacific Since both platformproducts are identical liquid methionine, complementary relationships can be formed If europe's production platform has a major overhaul, China's platform can transport some products to Europe and the Americas In turn, when the Nanjing plant is undergoing a major overhaul, European products can also be shipped to China and other Asia Pacific regions, so that the location layout can ensure the stability and timeliness of product supply kgm Reporter: How does Andesu set up and expand sales networks? What percentage of revenue are owned and resellers accounted for, respectively?kgm Jean-Marc DuBron: Andesu has a high direct sales rate, with approximately 73% of sales generated through its own sales team and about 27% through channels China is one of the five major sales areas in the world The sales method depends on the structure of the customer distribution in the country of the sales area For example, in some countries there will be large strategic partners, such centralized customers will be through their own sales team contact and maintenance, and some countries have a large number of customers but more dispersed, each customer size is not so large, the company in addition to their own team, but also in the local search for cooperation channels to connect small long-tailed customers In recent years, Andesu has opened new offices in Dubai, India, Turkey, Iran and other regions, developing markets through its own sales team in addition, the company also selects sales models for both functional and specialty product selling types Functional products include methionine and vitamins, there are a wider range of applications, the market is more mature, channel providers have been able to provide good services, so functional products use channels more chamber sorority And for enzyme preparations, ruminant special methionine and other special products, but also need a lot of nutrition knowledge and technical support, we also hope to develop this piece into the company's second-largest business pillar, will strengthen the strength of its own sales team Now the proportion of specialty productrevenue is only about 15%, there is also the potential for small mergers and acquisitions in the future to strengthen the product portfolio of specialty products kgm reporter: The company will consider buying or integrating the relevant assets and business within ChemChina in the future?kgm Jean-Marc DuBron: It doesn't look like much at the moment Andy Su specializes in animal feed additives, which may not already have in Blue Star or ChemChina, and now have some business partnerships, such as methanol procurement, but in small quantities kgm OA_show ('533'); Andesu is currently considering looking for a new location for a new plant in China to maintain its market share by expanding production With domestic methionine producers concentrating on the release of production capacity in 2016, Andesu faces the challenge of competing for market share kgm Caixin (Reporter Kaixi Huang) kgm in the past long time by overseas companies monopolized, Chinese enterprises difficult to break through technical barriers of the methionine industry, China's chemical enterprises are gradually through overseas acquisitions, independent research and development of the way to obtain market position kgm overseas assets acquired by China Chemical's Blue Star Group in 2005, currently generate 32% of sales from Europe, the Middle East and Africa, 18% from Central and North America, and 14% of the Chinese market It dominates the methionine market in China However, with the domestic methionine manufacturer's production capacity released in 2016, and the subsequent production of 50,000 tons/year of methionine projects by Ningxia Ziguang, Weifang Xin and Cheng, and the challenge of later competing for market share , Jean-Marc Dublanc, general manager of Blue Star Andes, and Gu Dengjie, deputy general manager, told Caixin that the company is considering finding a new factory site in China to maintain its market share by expanding production kgm currently expands production at its Nanjing plant in China to 140,000 tons/year According to dongxing Securities research, by the end of 2015, including the Nanjing plant, Andesu's methionine production capacity at four major production sites worldwide was 430,000 tons/year kgm methionine is an essential amino acid in animals, but can not be synthesized in animals, need to be ingested from food, methionine added to the feed, can save 40% of the feed Due to the complexity of industrial production processes, high technical barriers, and the production process by safety and environmental protection of strict supervision, so the industry presents a highly monopolistic market pattern Over the past decade, the global methionine market, Evonik, Andesu, Noviandand and Sumitomo, four companies accounted for more than 90% of the methionine market, with the first three accounting for 37%, 27% and 20%, respectively Methionine products have a considerable monopoly profit, gross margin can reach 50% kgm The road to overseas acquisitions of Chem China was launched in 2005 and is based on overseas acquisitions of six of the company's major business segments, namely, new chemicals and specialty chemicals, basic chemicals, petroleum processing, agrochemicals, tire rubber and chemical equipment After Methionine, the world's second-largest company, France's Andesu became the first acquisition target, ChemChina has since acquired agrochemical company Maxim Agam, Italian tire maker Pirelli, German rubber moulding machine maker Klaus Mafy, and in 2016 announced a $43 billion offer to buy Swiss agrochemical and seed maker Syngenta, which received widespread market attention kgm to place the acquired overseas assets in its listed companies, is the main idea of China Chemical to integrate the acquisition of assets Among them, Blue Star New Material (600299.SH), Fengshen (600469.SH) and Shalonda (000553.SZ) have become the gateway to the domestic listing sauc, Pirelli and Maxim Agam (later renamed Andaumai) Andesu management said ChemChina's main role was strategic investors and retained the company's original management kgm reporter: In addition to Andesu, China's own methionine manufacturers in the past two years are also actively expanding production capacity, will they worry about the future may be the situation of oversupply? How to evaluate the current market demand for methionine?kgm Gu Dengjie: China's total production of commodity feed in 2016 is about 200 million tons, but in animal protein production, i.e various meats, pork, chicken, beef, aquatic products, eggs, dairy products and so on, the total output is also about 200 million tons, these two figures are not matched, that is, a ton of feed can not produce a ton of animal protein According to the domestic feeding level, to achieve such animal protein production, the need for feed is about 500 million tons to 600 million tons, which means that there are 300 million to 400 million tons of feed is still deindustrialized, which is an important factor driving the growth of the market demand for feed additives So this is why China's methionine market is growing much faster than the world, the current global methionine market demand growth rate of about 6%, China is about 10% kgm reporter: Some time ago it was reported that and Su Nanjing factory suspended quotations and orders, intended to digest production capacity, the current situation?kgm Jean-Marc DuBron: It's just a small incident and we're back in business in two weeks In fact, in the past period of time, we sold more products than we thought kgm Gu Dengjie: The company's procurement, production and sales are carried out in accordance with the plan But sometimes there is a lot of volatility in orders, and if it fluctuates a lot, we adjust the pace of sales In addition, Andesu because of the market leadership position, we are responsible to the market and customers, but sometimes there will be some market speculation, we have to take measures to curb market speculation kgm Reporter: In addition to the Spanish plant under construction, does Andesu have plans to continue to expand production capacity?kgm Jean-Marc DuBron: Andesu currently has a 27% share of the global methionine market, and in order to secure such market share, Andesu's capacity will grow at the same time as global demand growth of 6% to maintain its customer base kgm in addition, the expansion of methionine plant, from planning to construction to output, takes a considerable amount of time, depending on the degree and size of the device integration, can be.