Jul. 4, 2017
A recent announcement by Limin Chemical
showed that its Propane Diamine project under the base material construction program of the company has been terminated and the use of a fund of Yuan143 million raised for the base material project has changed.
Yuan109 million will be spent on the acquisition of a 70% stake in Shandong Damin Chemical, while the balance of Yuan34 million will go to the high-efficient pesticide-targeted fundraising project. These projects include the annual 5,000-ton Propineb, 20,000-ton Metham, 500-Tondifenoconazole and 500-ton Azoxystrobin.
The Propane Diamine project of the base material construction program of Limin Chemical was initially designed to supply raw material for the company’s production of Propineb. Shandong Damin Chemical is currently one of the prime Propane Diamine producers in China, with an annual capacity of 3,000 tons, and has been making supplies to Limin Chemical for long years.
In 2016, Shandong Damin Chemical achieved business income of Yuan86 million, 43.3% up year-on-year; with a net profit of Yuan15 million, up 472% year-on-year.
Limin Chemical’s change from building a Propane Diamine plant of its own to the acquisition of a 70% stake in Shandong Damin Chemical renders better costs and risk control.
The acquisition ensures secure supply of Propane Diamine to Limin Chemical, also the industry chain of Limin Chemical is extended to raw materials in the upstream industry, which is now integrated with the company. Furthermore, Shandong Damin Chemical is in possession of a well-established Alkylamine production and marketing facility; therefore the acquisition will help Limin Chemical to strengthen its market position of Metiram products and to facilitate Limin Chemical to move into the sector of fine chemical intermediates, which include Alkylamine.
Limin Chemical is a segmented fungicide industry leader in China. Its acquisition of Shuangji Chemicals on an earlier date has been conducive to consolidation of its Mancozeb business, while this time the acquisition of Shandong Damin Chemical is of benefit to integration of its industry chain.