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Exploring Northwest industrial bases to understand the real agrochemical supply situation of Chinaqrcode

Oct. 10, 2019

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Oct. 10, 2019
Since 2017, the Chinese fine chemical industry has faced unprecedented industry regulatory compliance regulations. In fine chemical industrial parks along the eastern and southern coasts, as well as in the Yangtze regions, consecutive environmental compliance and workplace safety inspections were conducted, resulting in the shutdown and restriction of chemical production plants or even the closure of some industrial parks. 

As a positive response to China’s “National Green Development Strategy,” which aims to maintain the environment and provide clean water supplies while developing the economy, many fine chemical companies have drafted long-term strategies based on their experiences and knowledge, to reposition their development plans and redeploy their production resources.
 
In terms of pesticide production, new production facilities were constructed in Northwest China by several companies, including Liben, Qilu Pharmaceutical, Veyong, Yifan, Yongnong, Suli, Wynca, Lanfeng, Yangnong, Join King, Xiangshui Shijie (Nutrichem invested), Benxing, Lionchem, Ningxia Soochow and Zhongshan. 
 
This report will summarize the field visits conducted by its author to various chemical production plants in Northwest China, considering that their pesticide intermediate production standards have reached a certain level, which is constantly improving over time. The distribution of chemical parks in Northwest China can be summarized by the following distribution categories:
 
Chemical industry distribution route in Northwest China

In this paper, the author will present two major industrial parks, which are the Hohhot Economic and Technological Development Zone managed by Qilu Pharmaceutical, and the Ningxia Ningdong Energy and Chemical Base managed by Ningxia Yifan
 
Hohhot Economic and Technological Development Zone
 
Hohhot Economic and Technological Development Zone, which was constructed at the start of 1992, includes Ruyi Industrial Park, Jinchuan Industrial Park and Shaerqin Industrial Park. According to its general manager, Mr. Xia from Qilu Pharmaceutical, Ruyi Industrial Park was completed in May 1992 and is the first development zone in Inner Mongolia, covering an area of 13.6 km2. From January to July 2018, the companies operating in the park achieved a production value of Yuan4.42 billion, 14% up year on year, based on a fixed asset investment of Yuan3.441 billion, 62% up year on year. From January to June, service industry output reached Yuan4.247 billion. Ruyi Industrial Park contains the headquarters of 214 companies, which registered a total capital of Yuan2.1 billion. 
 
Shaerqin Industrial Park, located in Shaerqin Town, is home to some 50 companies, of which 23 still operate, including 10 large enterprises. Key projects launched in the park this year include Jinyu Baoling Biological Pharmaceutical and Jinyu International Biological Science and Technology Park.
 
Jinchuan Industrial Park was launched on 8th August, 1992, and was designated a national level development zone by the central government on 2nd July, 2000. The park currently comprises a southern section and northern section. The latter, which covers an area of 6 km2, is now fully completed while the former, where Qilu Pharmaceutical is located, began construction in 2005 and covers an area of 14.45 km2, of which 3.41 km2 is ready for industry use. The park’s infrastructure, which includes utility supplies, has been completed and was designed to serve more than 900 companies.
 
Within the industrial park, there are five high-tech pilot production bases, three national high-tech industrial demonstration projects and one recently constructed Chinese science and technology innovation base. The park has a daily power capacity of 23,500 KVA, a per-hour steam supply of 118 tons, a daily water supply of 45,600 tons, and a daily sewage treatment capacity of 6,000 tons.
 
 
A glimpse of the garden-style workshop of Qilu Pharmaceutical
 
Mr. Xia showed the report’s author around Qilu Pharmaceutical’s garden-style workshop, which covers an area of 40 hectares and has an abamectin production capacity of 3,000 tons per year. The abamectin fermentation workshop contains 36 automated fermentation tanks, with a capacity of 500 m3 each. 
 
Qilu Pharmaceutical controls 60% of the Chinese abamectin market and has spent Yuan3 billion in Hulun Buir, Inner Mongolia, to acquire 130 hectares of land for the production of abamectin series and spinosad. 
 
“Our production plant in Inner Mongolia has spent Yuan200 million on the procurement of 117 sets of sprinklers, 11 plasma odor treatment devices and five ozone odor removal devices to improve odor treatment. We cooperate closely with well-known Chinese research institutes and universities in researching advanced odor treatment techniques, having installed 14 biological towers that utilize biological processes to remove odor, therefore, making a breakthrough in odor treatment. Since 2018, we have installed 16 online monitors that can monitor organized discharges and unorganized discharges outside the plant’s boundaries around the clock.” 
 
Qilu Pharmaceutical has achieved success in the area of fermentation odor treatment, which will pave the way for the long-term production and supply of high-quality abamectin and spinosad.
 
Ningxia Ningdong Energy and Chemical Base
 
Ningxia Ningdong Energy and Chemical Base, located in Lingwu, Yinchuan City, is a national development zone developed for the establishment of a coal-based chemical industry and a coal-fired power generation base, in line with China’s "West to East Electricity Transmission Program." The area has proven coal reserves of 32.2 billion tons and prospective reserves of 139.4 billion tons, with 13 key mining sites reserved for development, each with a capacity of over 100 million tons. The industrial zone ranks sixth on the list of China’s top 30 chemical parks in 2019. Major coal-based chemical companies operating in the development zone include Shenhua Ningxia Coal, Sinopec Great Wall Energy, Ningxia He Ning Chemical, Ningxia Qinghua Group, Baofeng Group and Baota United Chemical.

The writer visited the development zone administration committee, keeping in mind that the zone has all the necessary supporting facilities with well-established utilities. There are four 330KV substations and 16 110KV substations, which form a multi-loop power supply system with reliable and secured power supply. Electricity power tariff: 1-10 KV at Yuan0.487, 35-110 KV at Yuan0.457, 110 KV at Yuan0.427, and 220 KV and above at Yuan0.396. 
 
Three major water supply plants have been built, with a daily water supply capacity of 840,000m3, supplying industrial water at Yuan2.8 per ton and plantation water at Yuan1.3 per ton. HP steam is supplied at Yuan99 per ton, MP steam at Yuan74 and LP steam at Yuan65. The price of natural gas is Yuan2.06/m3. Industrial gases such as oxygen, ammonia and carbon monoxide can be supplied from common air separation units.
 
Wastewater: Three industrial wastewater treatment plants and one domestic wastewater treatment plant have been built, which can be used to treat the highly salty water discharged by manufacturers in the industrial zone. The treatment capacity is 175,000 tons per day, at a tariff of Yuan5.6/m3.  
 
Solid waste: Four comprehensive residue yards have been built. The industrial residues are stored at the designated residue yard in the designated residue area. The industrial solid wastes are disposed of at a tariff of Yuan14.5 per ton.
 

Apart from the above supportive facilities, the local government builds and provides rental housing in the town of Ningdong for the staff of the resident enterprises in the industrial zone. This year, the rental charge was reduced to Yuan1.5/m2/year. Till date, Ningdong has been shaped into a livable town within the industrial zone, having accommodated hundreds of thousands of people.
 
Ningxia Yifan Biotechnology has also set up shop in this industrial zone. The project manager,.Wang, said that the complete supporting facilities in the industrial zone make the resident enterprises feel relieved. Yifan has acquired more than 30 hectares of land in the zone, where its first phase project is targeting production of 3,000 tons of clethodim (key intermediate fully self-supplied), 500 tons of flumioxazin and 500 tons of prothioconazole, which are expected to be bought on stream after the 2020 Spring Festival.
 
“Just for the pollution control of phase one, our investment has reached over Yuan100 million. The set-up of the world’s top level COD waste incinerator, solid waste rotary kiln and waste gas treatment equipment is to ensure the waste treatment complies with European and American standards. It is our positive response to the requirement of the zone administration committee that “no single drop of waste water should get into the Yellow River”, said Wang.
(See the attachment for Hazardous Waste Incineration Pollutant Emission Limits of Ningdong Energy & Chemical Base)

Outlook of Northwest China
 
Following the trip to Northwest China, here are three thoughts: 
 
1. The urban landscaping goes beyond imagination. From Hohhot to Wuhai, Yinchuan and Zhangye, plantations are seen everywhere and trees are planted along the streets, while drop irrigation facilities are quickly spreading. The Chinese government has provided long-term inputs to improve the living conditions of Northwest China. Does the green mountain and clear water environment indicate that China’s strict environmental compliance requirement will not relax?
 
2. High load factories, particularly the factories in Wuhai of Inner Mongolia, Shizuishan and Zhongwei of Ningxia, are being run where industrial parks are more centralized. From Wuwei to Jiuquan of Gansu, there are relatively less chemical works, but production is running at a satisfactory load. Moreover, enterprises moving to West China are mostly large industries that set up no small capacity of production. After the completion and running of these projects, will the new capacity have a new round of impact on the global pesticide supply structure?
 
3. The industrial parks are being developed vigorously, being landed by more and more industry players, while the environmental regulatory requirement is quite high in all the industrial parks, and even higher than it is in eastern China. In Wuhai’s Bayanobao Village, more than 30 projects are currently under construction at the same time. The writer believes that the Chinese pesticide supply is recovering rapidly.
 
India’s fine chemical industry has been growing surprisingly over recent years. There is a point of view that India's development opportunity comes partly from the industry regulation in China and that the Indian pesticide supply would replace Chinese supplies very soon. After this trip, the writer holds that the Chinese industry should not worry too much about it, as the speed of reconstruction of several chemical bases in West China making up the entire industry chain might go beyond the imagination of people. In the years ahead, India’s demand for chemical intermediates and crudes may still be covered by Chinese supplies. On the other hand, the recovery of the Chinese supply chain will contribute to the steady supply and stable price of products delivered to the Indian market. Both India and China may need to re-deploy their respective industry status and product advantage.
 
Under the current circumstances, do you think that India will eventually be able to take over the Chinese pesticide industry transfer? Which are the products where India has comparative advantage? Will that advantage sustain? What is the focus of the development of the Chinese pesticide industry? 
 
You are welcome to discuss this with the writer.

Wechat

Erwin Xue
erwin@agropages.com
+86 137 5088 4233 
Linkedin:linkedin.com/in/erwin-xue-7a5b8580


Attachment:
Hazardous Waste Incineration Pollutant Emission Limits of Ningdong Energy & Chemical Base
No.1
Item
Limit (mg/m3)
1
Flue gas blackness
Ringelmann Scale 1
2
Soot
10
3
Sulfur dioxide
50
4
Hydrogen fluoride
1
5
Hydrogen chloride
10
6
Nitric oxides (NO2)
120
7
Mercury and compounds (Hg)
0.05
8
Lead and compounds (Pb)
0.5
9
Cadmium and compounds (Cd)
0.05
10
Arsenic, nickel and compounds (As+Ni)
0.05
11
Chromium, Tin, Antimony, Copper, Manganese
(Cr+Sn+Sb+Cu+Mn)
0.5
12
Dioxins (ng TEQ/Nm3)
0.1

Note: For pollutant emission limits not included, the relevant national standard shall apply. 
 
Source: AgroNews

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