Monday, December 15, 2014

Hubei Taisheng: capacity of glyphosate technical expected to reach 130,000 tonnes in 2015

Summary: Hubei Taisheng will build a new production line for 60,000 t/a glyphosate technical with a total investment of about USD111.14 million. The construction period is 12 months. By the end of next year, this construction will be finished and be put into production. After that, Hubei Taisheng's production capacity of glyphosate technical will reach 130,000 t/a, ranking the first in China and the second in the world, according to Glyphsoate China Monthly Report 1410 on October by CCM.

On 15 Oct., 2014, Hubei Xingfa Chemicals Group Co., Ltd. (Hubei Xingfa) proclaimed that its holding subsidiary, Hubei Taisheng Chemical Co., Ltd. (Hubei Taisheng) will carry out a glyphosate technical production project of 60,000 t/a (phase I) in the Yichang Fine Chemical Industrial Park in Yichang City of Hubei Province. This project serves as the first phase of the expansion project of 100,000 t/a glyphosate technical production by adopting the pathway of glycine. The construction period of the first phase covers 12 months. When Hubei Taisheng finishes its first phase of construction by the end of next year (2015), its production capacity of glyphosate technical will reach 130,000 t/a, ranking the first in China as well as the second in the world.
The first-phase project includes constructing sewage treatment stations, salinity wastewater treatment devices as well as 90,000 t/a phosphorus trichloride, 60,000 t/a dimethyl phosphite, 60,000 t/a glyphosate technical, and 60,000 t/a methyl chloride recycling devices. The total investment of the first phase is USD111.14 million (RMB683.93 million). The main-body project of glyphosate will cost USD77.96 million (RMB479.73 million); the cost of land expropriation is USD16.49 million (RMB101.47 million). The investment of device expansion for the glyphosate salinity wastewater treatment adds up to USD13.43 million (RMB82.65 million). All the funding need to be collected by Hubei Taisheng itself.
The first-phase project is significant to both Hubei Taisheng and Hubei Xingfa, because it will probably bring enormous economic benefits to Hubei Taisheng. After the project is put into production, it is estimated that Hubei Taisheng can make a revenue of USD273.49 million (RMB1.68 billion), a pretax profit of USD44.99 million (RMB276.89 million) and a net profit of USD38.24 million (RMB235.35 million). Through the first-phase project, Hubei Xingfa could further coordinate itself with subsidiaries or joint stock companies in the Yichang Fine Chemical Industrial Park in producing ionic membrane caustic soda, aminoacetic acid, and organic silicon, to create an all-win situation ultimately.
According to the present and the future situation of the glyphosate demand, it is still unknown whether such a powerful capacity of glyphosate production can be fully released. After the first-phase project is put into production, Hubei Taisheng's full production capacity of 130,000 t/a must be influential to the glyphosate market in China. Hubei Xingfa is also concerned about this. It proclaimed, Hubei Taisheng would bear a certain sales pressure due to its large scale of production capacity of glyphosate. Meanwhile, the setting up of glyphosate projects in succession in parts of China might impact the price of glyphosate, leading to Hubei Taisheng's failure to reach its anticipated goal of economic benefits of the expansion project.
The capital needed for the first-phase project is a big challenge for Hubei Taisheng. Nevertheless, according to the profit made in the past plus the supports offered by its parent company Hubie Xingfa, the capital will not be a problem for Hubei Taisheng.
The business of Hubei Taisheng has been moving on smoothly and making profits. Particularly in 2013, Hubei Taisheng made a revenue of USD360.61 million (RMB2.22 billion), and a net profit of USD76.26 million (RMB469.29 million). In the first half of 2014, its revenue was USD189.44 (RMB1.17 billion), and the net profit was USD30.47 million (RMB187.48 million). The business of Hubei Taisheng is predicted, based on the picture of glyphosate industry in the second half of 2014, to remain the same or slightly excess that of 2013.
Hubei Xingfa is always attaching importance to Hubei Taisheng and providing supports to its operation, especially in the loan guarantee. On 16 Oct., 2014, Hubei Xingfa announced that it will provide a joint and several liability guarantee of USD65 million (RMB400 million) for Hubei Taisheng in Xiaoting Branch of Agricultural Bank of China.
One of the advantages of the Hubei Taisheng's expansion project of glyphosate technical is the raw material supply (Refer to Glyphosate China Monthly Report 1404: Advantages of Hubei Xingfa acquiring 51% shares of Hubei Taisheng for detailed information). Therefore, the most advantageous competence of Hubei Taisheng shall be the lower cost.
The establishment and expansion of production capacity of glyphosate technical has always been a popular topic in China. CCM will continue to report the Hubei Taisheng's progress of the glyphosate technical project, and the information on the establishment, reconstruction and expansion of the production capacity of glyphosate technical of other companies.
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Zhejiang Wynca to provide entrust loans of USD14.62 million to joint-stock company
Hubei Taisheng: capacity of glyphosate technical expected to reach 130,000 tonnes in 2015
Hubei Taisheng to purchase relevant assets of glyphosate salinity wastewater treatment project of Hubei Yuerui
Yichang Jinxin to launch 40,000 t/a glycine expansion project
China's demand for glyphosate TC to stay stable over next two years
Environmental protection capacity to become new core competence of glyphosate manufacturers
Ex-works price of glyphosate technical decreases by 4.27% in Oct. 2014 MoM
Export volume of glyphosate technical decreases by 5.62% in Aug. 2014 MoM
China PMIDA market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China glycine market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China DEA market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China IDAN market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China yellow phosphorus market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China phosphorus trichloride market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China isopropylamine salt market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China paraformaldehyde market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China chloromethane market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China methylal market in first work week of Oct. 2014 (8 Oct.-11 Oct.)
China is currently the largest glyphosate supplier in the world, with low production costs anda good chemical production foundation. The dynamics of China's glyphosate greatly impact the global supply structure. Over 80% of theglyphosate produced in China is exported to more than 20 destinationsworldwide. Despite its large output and capacity, China's glyphosate industry has many shortcomings, includingovercapacity, dispersed production, few overseas registrations, poor environmental protection awareness, lack of governmental supervision, inefficient production technology, etc. Changes in China's glyphosate industry have not only been considerable, but also frequent, puzzling both outsiders and insiders,ignoring where to go next. That's because the influencing factors are many and changing frequently, thus making it highly necessary for timely update and close follow-up of the dynamics in this industry. The Glyphosate China Monthly Report brings you the latest information and in-depth analysis on market trends, supply and procurement opportunities in raw materials and intermediates, technology process, price updates, new policies and company dynamic, etc.
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