Hebei Lansheng Biotech Co., Ltd. ShangHai Yuelian Biotech Co., Ltd.

Xingfa Group's 2021 profit increased by 583.58% year on year, glyphosate technical production capacity to reach annual 230,000 tonsqrcode

Apr. 1, 2022

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Apr. 1, 2022

On March 21, Hubei Xingfa Chemicals Group Co., Ltd released its 2021 annual report, revealing the company's operating income of RMB23.607 billion which is an increase of 28.88% year on year, a net profit attributable to shareholders of RMB4.247 billion which is an increase of 583.58% year on year and net profit after deduction of recurrent gains and losses of RMB4.487 billion which is an increase of 609.87%. The operating income of glyphosate and its by-products reached RMB7.548 billion, which is an increase of 72.07% year on year.

During the reporting period, the company's new project construction has been fruitful, where a number of new projects, such as Yidu Xingfa Phase II project and Xingxing Lantian 400,000-ton synthetic ammonia projects, have been either started or completed for operation, adding up to a strong impetus to the transformative development of the company.

In terms of glyphosate, Taisheng Company, a subsidiary of Xingfa Group, has an annual production capacity of 180,000 tons of glyphosate (including 50,000-ton of its wholly owned subsidiary, Inner Mongolia Xingfa), ranking first in China. Inner Mongolia Xingfa has currently a 50,000-ton glyphosate capacity under construction, being planned for completion and operation in the third quarter of 2022. At that time, the company's glyphosate production capacity will reach 230,000 tons per year.

Taisheng Company has a significant raw material advantage, mainly including its own supportive annual 100,000-ton glycine capacity; the large-scale yellow phosphorus capacity of the company and its subsidiaries; the organosilicon by-product HCL in the Yichang Industrial Park, which is the raw material required for glyphosate production. Moreover, the chloromethane facility can effectively consume the chloromethane from production of glyphosate but can also reduce the environmental impact of glyphosate, whilst improving the economic benefit of glyphosate production. Through years of development, the company has had a good command of the advanced glyphosate production technology and pollution treatment technique, ranking at the leading level in Chinese industry.

In addition, a number of market investment institutions recently held a conference call with Xingfa Group, participated by the secretary of the board of directors of the company, having replied to the issues of concern from investors. Some of the questions and answers are as follows:

Q: What is the company's planned new launches of production in 2022?


A: According to the company's project construction plan, it is expected that the following new production capacity will be brought on stream in 2022: 1) Houping’s annual 2-million-ton phosphate ore mining project to be completed in the fourth quarter, when the company's phosphate ore production capacity will increase from 4.15 million tons per year to 6.15 million tons per year; 2) Inner Mongolia Xingfa’s annual 50,000-ton glyphosate production capacity is scheduled to be completed in the third quarter, when the company's glyphosate technical production capacity will increase from 180,000 tons per year to 230,000 tons per year; 3) Xingfu Electronical’s annual 70,000-ton electronic grade sulfuric acid, 20,000-ton etchant, 10,000-ton electronic grade hydrogen peroxide production capacity is planned to be completed within the year, upon completion, the company's electronic grade sulfuric acid production capacity will increase from 20,000 tons per year to 90,000 tons per year, electronic grade etchant production capacity will increase from 30,000 tons per year to 50,000 tons per year and electronic grade hydrogen peroxide production capacity will reach 10,000 tons per year; 4) Xinjiang Xingfa’s annual 50,000-ton dimethyl sulfoxide phase II project is scheduled to be completed in July, when the company's dimethyl sulfoxide production capacity will increase from 40,000 tons per year to 60,000 tons per year.


Q: The company's operating income in 2021 increased by 30% year on year, but the operating cost fell by 1% year on year. What was the reason for that?


A: In 2021, the company's operating cost decreased year on year, mainly attributed to the significant reduction of trading volume. The annual trading business-oriented operating income was RMB1.957 billion, down 64.90% year on year, the cost of trading business was RMB1.888 billion, down 65.63% year on year.


Q: What was the overall operating situation of the company from January to February 2022?


A: From January to February 2022, the chemical industry, as a whole, continued its booming since last year. The prices of the company's main products, glyphosate, organosilicon, yellow phosphorus, phosphate fertilizer and dimethyl sulfoxide, remained in general at a high level, leading to a higher profitability. The company is prepared to seize the favorable market opportunities and to organize effective production and operation, whilst striving to reduce the cost of raw material procurement so as to achieve a satisfactory performance throughout the year.


Q: Does the company currently export phosphate fertilizers?


A: Since the state’s implementation of the fertilizer export inspection regulation in 2021, fertilizer export has been restricted to certain extent. At present, the company is exporting fertilizers in an orderly manner under the precondition that the needs of domestic customers are fulfilled. It is expected that with the fulfillment of the domestic needs of fertilizer for the planting season, the export policy will be relaxed in an orderly manner.

Q: What is the progress of the company's black phosphorus research and development?

A: As of now, the company's joint venture, Hubei Zhongke Molin Technology Co., Ltd, possesses a stable 1 kg-grade black phosphorus preparation process using white phosphorus as raw material, where the product conversion rate reaches 95%. At present, a scale-up 30 kg black phosphorus testing facility is under development; positive progress has been made in research and development of noble metal catalyst development, which is under trial in the labs of catalyst manufacturers. In order to obtain further data of industrialization of black phosphorus in the modified noble metal catalyst, and to accelerate commercialization of black phosphorus, as being based upon the completed trial production of hydrogen peroxide palladium catalyst, the company has begun industrialized application in the company's hydrogen peroxide production facility. The plan is to decide whether to start market promotion or continue to improve the process of black phosphorus based on the application results in the second half of this year. As the catalyst system is a complicated system, industrialization of black phosphorus as a modified noble metal catalyst takes time. There is an uncertainty about when it can be promoted to market or when market promotion can be successful. 


Q: What is the current market situation of the dimethyl sulfoxide of the company? Will there be increases of new capacity in the future?


A: The company's existing dimethyl sulfoxide production capacity is 40,000 tons per year, including the annual 20,000 tons of the wholly owned subsidiary Xinjiang Xingfa, the annual 20,000 tons of the joint venture Chongqing Xingfa. In addition, Xinjiang Xingfa is currently building an annual 20,000-ton dimethyl sulfoxide capacity, being planned to be completed in July this year. Dimethyl sulfoxide is primarily used as a solvent for pesticide, medicine, integrated circuit and carbon fiber industries. In recent years, with the rapid development of the integrated circuit and carbon fiber downstream, dimethyl sulfoxide market has continued to grow, with a higher profitability. The company is confident in the future prospects of dimethyl sulfoxide products. Dimethyl sulfoxide, in the production process, has a greater risk of flammability and explosion. In the current circumstance that chemical industries are requested to be relocated within chemical industrial parks, the new dimethyl sulfoxide capacity is expected to face greater regulatory pressure.


Source: AgroNews


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