Small, scattered, weak! There is no unicorn enterprise in China’s biopesticides race track yet

With the increasing awareness of ecological environment protection and food safety, the international community has put forward increasingly strict requirements for chemical pesticides. Environmentally friendly biopesticides with low toxicity, low residue, high biological activity, and high selectivity have become the development direction of future world pesticides.Nevertheless, China’s biopesticide enterprises are still relatively weak and have not yet established industry unicorn enterprises; In addition, the potential of the industrial chain has not yet been established, and the penetration rate is not high. There is still a long way to go in the future.2.pngWhat exactly is biopesticides?At present, there is no clear definition of its scope in China. The traditional biopesticides in China only refer to microbial pesticides, but with the rapid development of science and technology, the connotation and extension of biopesticides continue to deepen, and the exploration of their concepts and categories is also more extensive.Professor Zhang Xing, a professor and doctoral supervisor at the School of Plant Protection at Northwest A&F University, and director of the Research and Service Center for Pollution-free Pesticides at Northwest A&F University, systematically introduced the concept, classification, and characteristics of biopesticides in 2002, which was recognized by the industry.Biopesticides refer to various physiological active substances that can be used to prevent and eliminate harmful organisms such as diseases, insects, and grasses, as well as those derived from organisms and can be used as pesticides.He also pointed out that biopesticides include two categories: biopesticides and biochemical pesticides. Biological pesticides refer to commercial living organisms used to prevent and control harmful organisms such as diseases, insects, grasses, etc., such as natural enemy insects, genetically modified crops, fungi, bacteria, viruses, nematodes, microsporidia, etc; Biochemical pesticides refer to bioactive substances with a certain chemical structure separated from organisms that can control harmful organisms. If such substances can be artificially synthesized, the structure of the synthetic substances must be identical to that of natural substances (but the proportion of isomers contained is allowed to be different), such as botanical pesticides, insect pheromone and antibiotics.In addition, Huang Jiguang, associate professor of the South China Plant Pesticide Research Center at South China Agricultural University, introduced that the commonly used biopesticides now include biochemical pesticides, microbial sources, plant sources, natural enemy organisms, and genetically modified plants that are resistant to pests and diseases. The natural degradation of biopesticides results in generally low residues in agricultural products, making agricultural products grown with biopesticides almost pollution-free and residue free.Nowadays, it is widely believed in the industry that biopesticides refer to pesticide formulations made directly from living organisms or their metabolites for the prevention and control of pests, weeds, and other harmful organisms, or pesticide formulations synthesized through biomimetic synthesis that have the same structure as natural compounds and have insecticidal and disease treating effects.3.jpgMarket capacity exceeding 10 billion yuanFrom the perspective of market capacity, we can see that the industrial value of global biopesticides is constantly highlighting, with a market space of tens of billions of dollars.According to S&P Global’s calculations, the global sales of biopesticides exceeded 3.3 billion US dollars in 2017. From 2020 to 2025, the global biopesticides industry market size will grow at a compound annual growth rate of about 10%. By 2025, the global biopesticides industry market size will reach over 8 billion US dollars. Based on this growth rate, it is expected that the global biopesticide industry market size will be approximately 8.8 billion US dollars in 2026.The compound annual growth rate of the agricultural biological agent market from 2016 to 2022 will reach 12.76%, reaching 1.135 billion US dollars by 2022. Among them, the global bio fungicide market value will be 1.6 billion US dollars in 2020, and will reach 3.4 billion US dollars by 2025, which is expected to grow at a compound annual growth rate of 16.1%.So, what is the market capacity of biopesticides in China?According to data from the National Bureau of Statistics, as of 2021, there are approximately 200 biopesticide production enterprises in China, with an annual production capacity of around 140000 tons and an annual output value of about 3 billion yuan, accounting for about 10% of the total pesticide output value. The annual output value of the four strains of Jinggangmycin, gibberellic acid, avermectin, and Bacillus thuringiensis all exceeds 100 million yuan. The annual use of biopesticides has reached around 80000 tons, with a control area of about 400 million acres and a certain amount of exports.In addition, the top five products of microbial pesticide production are Bacillus thuringiensis (the largest), Bacillus subtilis, cotton bollworm nuclear polyhedrosis virus, Metarhizium anisopliae, and Bacillus polymyxa products, which account for more than 75% of the total microbial products. Gibberellic acid, aminooligosaccharin, brassinolide, triacontanol and 14 hydroxy brassinolide are the top five varieties of biochemical pesticide output, accounting for about 70% of the total amount of biochemical pesticides. The top 5 varieties in terms of plant-based pesticide production are matrine, camphor, rotenone, spiramycin, and triptolide, accounting for approximately 80% of plant-based pesticide production.According to agricultural industry observations, China’s biopesticides industry is in a climbing stage. To compete with foreign biopesticides giants, we cannot rely on technology or products, but need to break through in emerging markets and business models. Otherwise, the competition will be very fierce.4.jpgReason for outbreak: driven by both market and policyObservations have found that due to the dual influence of the market and policies, China’s biopesticide industry has entered a period of accelerated development.From a policy perspective, after banning five highly toxic pesticides such as methamidophos, relevant national departments are currently considering a work plan to gradually phase out and ban existing highly toxic pesticides.In addition, the “Pesticide Industry Policy” jointly issued by the Ministry of Industry and Information Technology, the Ministry of Agriculture, the Ministry of Environmental Protection, and the General Administration of Quality Supervision, Inspection, and Quarantine of the People’s Republic of China also clearly proposes to accelerate the research on high safety, low risk products and application technologies, and gradually limit and eliminate high toxicity, high pollution, and high environmental risk pesticide products and processes; Encourage the development of pesticides, biopesticides for small-scale crops, and new pesticide products for non agricultural leaders.In addition, at the market level, biopesticides are gradually occupying an important share in advantageous vegetable and fruit producing areas, and their role in comprehensive pest control is becoming increasingly prominent.According to Zhang Yanqiu, the director of the Pesticide Testing Institute of the Ministry of Agriculture, the Ministry of Agriculture is currently formulating policies to encourage the registration of biopesticides, and has launched pilot projects for low toxicity and biopesticides subsidies in some counties (cities) in 8 provinces (cities) such as Shanghai and Shandong. Different subsidy methods and operating mechanisms have been explored, and in order to accumulate experience in obtaining larger scale subsidy funds, the National Development and Reform Commission and the Ministry of Science and Technology have also increased their support for biopesticides research and development Special support for production. With government guidance, social promotion, and corporate efforts, China’s biopesticide industry will soon usher in a “spring” of development.Agricultural industry observers believe that in addition to policies and markets, another key factor is the widespread use of biopesticides themselves.Perspective reveals that biopesticides have special advantages that chemical pesticides do not. Firstly, it is safe and can specifically select targets without causing harm to non target organisms; Secondly, it is environmentally friendly, capable of rapid decomposition with minimal residue, and can even synergistically promote root and plant growth with microorganisms in the soil; Finally, the possibility of developing resistance is low, and biological insecticides typically act through multiple modes, resulting in low tolerance of insects to them.5.jpgMonopolies have emerged abroad, but unicorn enterprises have not yet emerged in ChinaSince 2010, in order to quickly strengthen the research and development competitiveness of biopesticides technology, multiple large-scale mergers and acquisitions and technical cooperation have been completed between the European and American biopesticides markets. At present, the global biopesticide industry has gradually gathered in a few large pesticide companies, forming a oligopoly pattern.With the support of policies, a large number of biopesticide companies have also emerged in China, such as Lanyue Technology, Lanfeng Biochemical, New Chaoyang, Deqiang Biology, New Ruifeng Biochemical, Weike Biotechnology, McClow Biotechnology, Hailier Chemical, Suli Co., Ltd., Qianjiang Biochemical, etc.Despite this, the market penetration rate of biological pesticides in China is less than 10%, and it is expected that the market penetration rate of biological pesticides will exceed 20% in 2030. The current opportunities and challenges of biopesticides coexist, and breakthroughs in technology, cognition, industry, and business models are still needed.The development of biopesticides in China is constrained by three major aspects:Firstly, the scale of biopesticides enterprises is small, the research and development cycle of pesticide products is long, and the investment in scientific research is small; Secondly, the slow efficacy of biopesticides makes it difficult to achieve immediate results, and some pesticide products have strong technical requirements and are more complex to apply. These factors also pose challenges in the promotion and application of biopesticides.Secondly, homogenization is severe. Compared with the technology research and development level of other biopesticides worldwide, the market homogenization of biopesticides in China is currently severe. There is still room for progress in technology research and promotion, including low-level repetitive development, insufficient funding, and a lack of core technology, which hinders the technological development of the biopesticides industry.Thirdly, the awareness of farmers is low. Due to China’s small-scale agricultural economy as the main production method and the slow effectiveness of biopesticides, some farmers have insufficient understanding and application of biopesticides, and their acceptance level is generally relatively low. In addition, China’s biopesticides field lacks core technologies, product varieties are limited, industry production processes are outdated, and production efficiency is low, resulting in higher costs of biopesticides production, Further increasing the difficulty of promoting and applying biopesticides in China.According to the observation and perspective of the agricultural industry, there are currently no giants born in the field of biopesticides. More than 85% of the enterprises that contribute biopesticides come from traditional pesticide enterprises, and the sales volume of biopesticides is lower than that of traditional pesticides. In addition, the strength of biopesticides enterprises is not as strong as traditional pesticides. Even Qianjiang Biochemical, which is known as the “number one biopesticide company”, has a market value of only 4.5 billion yuan, and there is still a long way to go before unicorn enterprises.6.jpgTo summarize, China’s biopesticides started late but developed rapidly, which is closely related to policies and markets; But future development is not only about technological breakthroughs, but also breakthroughs in the industrial chain. The competition between China’s biopesticides and the world must be the competition in the biopesticides industry chain, talent, and even services, rather than technology and products.