European and multinational companies have significantly increased the volume of production of their drugs in Russia - this is the result of the first year of the anti-dumping duties on herbicides from the EU and the UK in the EAEU. In just 6 months of 2020, the volume of production of herbicides under the brands of these companies based on Russian enterprises turned out to be 36% higher than in the entire 2019. Sales of weed control drugs from domestic manufacturers for 6 months of 2020 also exceeded last year's figures. At the same time, the volume of herbicide imports to Russia from the EU is consistently decreasing, and foreign companies are investing in the construction of their own production sites in the Russian Federation. Antidumping measures entered into force on July 18, 2019 in accordance with the decisions of the Board of the Eurasian Economic Commission of May 29, 2018 and June 18, 2019: according to them, for herbicides from the European Union, an anti-dumping duty of 27,47 to 52,23% is applied.
More than a year has passed since the introduction of anti-dumping measures against imported herbicides from the EU and Great Britain in the EAEU. From July 18, 2019 import of finished products from Europe is subject to duties in the amount from 27,47% to 52,23% - depending on the manufacturing company (for the largest market players, the amount of the duty was set on an individual basis). It should be noted that the duties were supposed to be introduced in 2018. However, the corresponding decision of the Board of the Eurasian Economic Commission (EEC) dated May 29, 2018 No. 90 turned out to be frozen: the Republic of Kazakhstan blocked anti-dumping measures. Approval from all EAEU members was received by their updated version, the changes in which were fixed by the decision of the EEC Board dated June 18, 2019 No. 104. The main difference between the editions was the exemption from duties for a number of herbicides imported from Europe to the territory of the Republic of Kazakhstan and the Republic of Belarus. On the territory of the Russian Federation, anti-dumping duties were introduced in full.
“Even before the anti-dumping measures came into force, multinational companies began to look for ways to get their products out of duty. For example, two large foreign manufacturers decided to cooperate with the EEC and signed price agreements, according to which they undertake not to reduce the price level and not to exceed the pre-prescribed volume of imports, - says Vladimir Alginin, Deputy General Director of Firm "August" JSC and executive director of Rossiysky Union of CPSP Producers. - Also today, many European companies have begun to produce herbicide preparations on the territory of the Russian Federation. Most of the imported active ingredients for the production of plant protection chemicals (CPPP) are not subject to duties - this applies both to domestic producers of pesticides and to foreign ones that process their raw materials at Russian enterprises. In addition, foreign companies began localizing production in our country. Thus, two multinational companies will place their factories in the Lipetsk special economic zone ”.
As noted in the company "August", at domestic enterprises there is a tangible increase in the production of drugs under the brands of foreign manufacturers under the tolling scheme (processing of foreign raw materials). For comparison: in 2018, 11,7 thousand tons of herbicides were produced in this way, in 2019 - 16,2 thousand, and for 6 months of 2020 this figure exceeded 22 thousand tons (which is 36% more than for the entire 2019). Accordingly, the import of herbicides from the EU, which has become less profitable, is gradually decreasing: from 14,7 thousand tons in 2018 to 8,3 thousand tons in 2019. It is indicative that in 2020, during the first half of the year, only 2,8 thousand tons of weed control drugs were imported from Europe to Russia.
“We have always said to our foreign colleagues: let's work in the same conditions,” says Vladimir Alginin. - Domestic manufacturers of plant protection chemicals bear a high tax burden, and many of them, like the August company, still take a socially responsible position, actively developing the territories of their presence and supporting their employees. However, we had a situation when foreign companies imported finished products into the country, paid 2,5 times less from their sale to the budget than Russian manufacturers, and at the same time pushed them out of the market. Localization of the production of plant protection products in the Russian Federation means equal rules of the game - both in terms of tax burden and in the field of logistics, and for our state this means an influx of investments and new jobs. Such measures taken to protect the domestic market are by no means uncommon: for example, it is generally prohibited to import into the territory of the PRC neither ready-made preparative forms of CCPP, nor active substances. Thus, their production complex works for the domestic market and for export. "
As for the volume of sales of domestic herbicides, against this background, in the first half of 2020, it exceeded 47,5 thousand tons (while sales for the whole of 2019 amounted to 47,2 thousand tons, according to the Russian Union of Chemical Producers plant protection). As the experts of "August" note, Russia is one of the few countries in the world where full-fledged competition between local producers and multinational companies has remained in the field of CPSP production: in most states, farmers are provided mainly by the latter, and they dictate prices. Preservation of the competitive struggle, in turn, is beneficial for domestic agricultural producers. It allows them to get the best price offers and high-quality service - for example, technological support, which is being developed throughout the country by the sales offices of the "August" company.
“The introduction of anti-dumping duties did not affect the range of plant protection products offered to farmers in any way - it is constantly expanding, some drugs have not disappeared from the market either, competition remains in the same regime,” says Vladimir Alginin. - The production of those herbicides that have become unprofitable to import due to anti-dumping duties is localized in Russia. Domestic sites today fully meet the requirements necessary to create almost the entire line of formulations of imported herbicides. The duties did not affect the cost of drugs for agricultural producers either: firstly, on the territory of the EAEU, local producers are monitored for an unjustified increase in prices for herbicides, and secondly, theoretically, prices for products can be increased - but practically nobody will buy them. Today, farmers have access to preparations from the largest European companies, plant protection products from China, and a wide range of products from local manufacturers, all of which are of good quality and are quite effective in use. If we talk about growth prospects, then all the players in the industry have them: we believe that the level of growth in sales of CPSP in Russia by 8-10% per year will remain and in the future this market will double. "
Material provided by the press service of the company "August"