Nippon Soda to form joint venture in South Korea to produce thiophanate-methyl

Nippon Soda announced that it would be forming a joint venture in South Korea in May with Mitsubishi Corp. and local partner Namhae Chemical for the production of thiophanate-methyl, the bulk ingredient of its Top Sin-M fungicide.

The Tokyo-based company will provide its production technologies to the new joint venture, to be named Nisso Namhae Agro, which is to construct a plant at a cost of $37.5mn, or about 3 bn yen, at Namhae’s Yeosu works. The plant’s output capacity will be 5,000 t/y, almost the same as its Takaoka plant’s capacity in Japan. Trial production is targeted to start in the fall of 2012, to be followed by commercial production at the end of that year. Namhae, founded in 1974 in Seoul, is the fertilizer industry leader in South Korea with sales of 1,135.7 bn won, or $ 101 bn, in fiscal 2010.

Nippon Soda, which has been running its domestic plant at full capacity amid rising demand, chiefly in emerging markets, resolved to establish an offshore production base because the yen’s recent strength has been eating into profit. The deciding factors for its choice of location were stable access to feedstock from a neighboring ethylence plant; logistics for export through the nearby port of Gwangyang, a well-equipped East Asian hub port, and reduced national and local taxes for a period for setting up a new plant, provided by South Korea’s Foreign Investment Promotion Act.

Top Sin-M, which was developed by the company and launched in 1971, remains one of its core products. Highly safe and effective against a wide range of fruit and vegetable crop diseases, the fungicide is sold in more than 80 markets, including those in the West.