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.
Table
of Content: Glyphsoate China Monthly Report 1410
Zhejiang Wynca's
subsidiary to draft national standards for by-product of glyphosate: sodium
pyrophosphate
Sichuan Fuhua and
Jiangxi Jinlong to draw national standards for by-product of glyphosate: sodium
phosphate dibasic dodecahydrate
Monsanto expected
to sell anti-glyphosate soybean seed in 2016
Nufarm's glyphosate
gains registration on pre-harvest oilseed rape
Raw material shed
of Shandong Binnong explodes on 29 Sept., 2014
Statement of
Shandong Binnong on 9•29 explosion
Shandong Binnong's
revenue in first three quarters of 2014 reaches USD268.12 million
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.
About CCM
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