ABA CHEM and FMC signing supplementary agreement, reaching a value of RMB 2 billion

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On September 30, ABA CHEM announced that it has signed the supplementary agreement to the customization service with ARGO SINGAPORE PTE. LTD. The supplementary document covers a service period from January 1, 2022 to December 31, 2024, with a total value of approximately RMB2 billion. During the service period, ABA CHEM will provide FMC with customized pesticide production.

Back in 2018, ABA CHEM entered into a long-term customized production agreement with FMC. The cooperation is divided to 3 phases, each phase of cooperation is for a period of 3 years. The phase 1 begins from January 1, 2019 and lasts until December 31, 2021, amounting to a value of approximately RMB3.5 billion. At the end of each phase, the cooperation will automatically renew towards the next phase after results are accepted and confirmed by both sides.

According to the announcement, ABA CHEM has rich experience in high-end customized production, complete production and advanced environmental facilities. ABA CHEM has built very modern and high standard smart workshops, which enable the company to undertake production in strict compliance with requirement. To provide high-end customized service for FMC is in line with the existing business model of ABA CHEM. The signing of the supplementary agreement will ensure its stable pesticide intermediate sales, proper profitability and sufficient cash flow in the next 3 years (2022-2024), to the benefit of the company’s high-end customization development on a long-term basis. 

According to ABA CHEM’s semi-annual report, in the first half of 2021, ABA CHEM achieved revenues of RMB1.159 billion, of which the revenue of pesticide intermediates increased by 15.82% year-on-year. The reason for the steady growth is attributed to the company’s good sale of major products in the first half of 2021, while the company’s partnering factories have  started to play a part, which facilitated customized production of pesticide intermediates. Hence, operation management capacity is enhanced, efficiency is increased, cost is reduced, steady growth is maintained, and profitability is improved.