In 2018, Jiangsu Flag Chemical Industry Co., Ltd
reported business income of Yuan1.65 billion, which is a 27.4% increase year on year, with profits attributable to the mother company of Yuan210 million, which is 78.3%, and a gross profit rate of 24.1%. In 2018, the gross profit rate of the company grew continuously, having increased from 19% in the first quarter to 31% in the 4th quarter. The company’s turnover of fixed assets is remaining at a high higher level, ensuring the begins payback of its investment.
The impact of Xiangshui's accident to the company, however, has been limited. Since 2017, environmental compliance regulations have has become more stringent in Jiangsu Province. Production of pesticide and intermediate manufacturers has been terminated or restricted, which has affected supplies of some intermediates. As a result, the production load of the company in 2018 was not high, and purchase orders placed to the company were not fully implemented, thus having reduced the short-term business performance of the company.
On the 21st March 2019, a large storage tank explosion occurred at the Xiangshui Tianjiayi Chemical Works, Yancheng City, spreading to 16 surrounding manufacturers within the chemical park. However, as the company has not yet resumed the purchase of intermediates to manufacturers in Yancheng, so the impact of the explosion to the company has remained quite limited. On the other side, the company has a secured supply of 1000 tons of the fenoxaprop-p-ethyl, which is one of the main product of Tianrong Group that is located within the explosion-affected Xiangshui Chemical Park. So it may benefit to the company.
The company’s 3 workshops are now being placed under pilot production, which include the annual 400-ton HPPA and 600-ton HPPA-ET workshop, the annual 300-ton novaluron technical 98% and annual 300-ton spiromesifen technical 96% workshop, the annual 500-ton imazamox technical 97% and 500-ton imazapic technical 97% workshop. These workshops are expected to be brought to full production by April 2019.
The company is currently a strategic supplier to multinationals, such as Dow AgroSciences, Bayer CropScience, Syngenta and BASF. As benefitting from the collaboration with multinationals, the company might closely watch the production dynamics of multinationals, which helps the company to follow up on market needs and develop superior products of promising market prospects.