Wednesday, May 23, 2012

Glycine Route Glyphosate Shows Competitiveness in China

With the increasing overseas orders and growing price in Q1 2012, some glyphosate technical manufacturers adopt glycine route resume expansion program, which has shown the remained competitiveness of glycine route in China, according to CCM International’s May Issue of Glyphsoate China Monthly Report.

It's confirmed by CCM International that two glyphosate technical manufacturers, Sichuan Fuhua Tongda Agro-chemical Technology Co., Ltd. (Sichuan Fuhua) and Hubei Taisheng Chemical Co., Ltd. (Hubei Taisheng), are expanding glyphosate technical production lines with capacity of 50,000t/a respectively (please refers to relative stories in this issue).
The running production lines and expansion projects in the two companies all adopt glycine route. After the launch of the two expansion projects by the end of this year or next year, the proportion of glycine route in China will increase to 64.3% from 59.6% currently. And the top three glyphosate manufacturers—Sichuan Fuhua, Hubei Taisheng and Zhejiang Wynca all adopt glycine route then.
Both of the two companies claimed that the expansion is on the basis of the original plan and the future prospect. China had undergone a period of crazy glyphosate expansion in 2008, which results in the serious overcapacity and long-term gloomy glyphosate market, and many companies canceled or suspended new glyphosate plan. In late 2011 and Q1 2012, overseas orders increased and glyphosate price rose, and there is profit margin in glyphosate production.

Competitiveness of the three routes are determined by the technology maturity level, manufacturing cost and raw material accessibility. Since all the three routes are mature, competitiveness is mainly determined by comprehensive manufacturing cost.
Glycine route, the firstly commercialized and most popular one, has the dominance in the short-term future because of its comprehensive cost advantages resulted from the less sensitivity to petroleum price and recycled by-product monochloromethane.
It's a general rule that manufacturers with integrated downstream and upstream industries has cost advantage, and glyphosate technical production adopting glycine route is capable of integrating glyphosate industrial chain because of lower investment and technical thresholds.
Both Sichuan Fuhua and Hubei Taisheng have built a comprehensive industrial chain centered in glyphosate production, such as DMP production lines, glycine production lines and monochloromethane recycle.
"By utilizing natural resource and taking advantages of raw material supply, coupled with by-product utilization, Sichuan Fuhua could achieve 5-10% profit margin in glyphosate business at present, while many other glyphosate producers are surviving on the edge of profit loss." Mr. He, Sales Manager from Sichuan Fuhua said.

Source: Glyphsoate China Monthly Report 1205

Content of Glyphsoate China Monthly Report 1205:
Zhejiang Wynca achieves lowest net profit since its listing in 2001
Sichuan Fuhua to expand 50,000t/a glyphosate capacity by Sept. 2012
Zhejiang Jinfanda to hold 132,000t/a glyphosate capacity by 2013
Three listed glyphosate companies' foreign operating revenue increased in 2011
Glyphosate hard to occupy the market share left by paraquat AS
Glycine route glyphosate shows competitiveness in China
Patent applications show nutrient-containing glyphosate products a new trend
Glyphosate price stays stagnant in May 2012
Glyphosate formulation export sets a new record in March 2012
Analysis of glyphosate export in Q1 2012

Glyphosate China Monthly Report, a monthly publication issued by CCM International on 20th of every month, will keep track of latest dynamics, hotspots and competitiveness analysis, and forecasts on market trends of China’s glyphosate industry.

About CCM
CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.
For more information, please visit
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