Glyphosate "Giant" Jiangshan to launch phosphorus chemical circular industry chain base

On October 10, Chinese agrochemical company Jiangshan Agrochemical & Chemicals announced that a ″Cooperative Agreement on Investment in Phosphorus Chemical Circular Industry Chain Project″ was signed with the People’s Government of Weng’an County of Guizhou Province and Wengfu (Group) Co., Ltd., on October 8, 2022, with the aim of establishing a phosphorus chemical circular industry chain base.

Under the agreement, Jiangshan and Wengfu will make joint investment to establish a phosphorus chemical circular industry chain base at a cost of RMB22 billion. The project is located within the Fine Chemical Industry Park at the Guizhou Weng’an Economic Development Zone, covering some 6,000 mu of land (1mu = 1/15 hectare).

Wengfu Group is a state-owned large-scale phosphorus chemical company engaged in phosphate ore mining and dressing, phosphate fertilizers, phosphorus coal chemicals, and fluorine and iodine chemical production, covering research, development, trade and international engineering contracting. Its major scopes of business include phosphate ore mining and dressing; phosphoric acid, sulfuric acid, anhydrous hydrogen fluoride, hydrofluoric acid, fluorosilicic acid and cryolite production; and aluminum fluoride, sodium fluorosilicate and iron phosphate productions. According to related data, as of December 31, 2021, the total assets of Wengfu Group was RMB39.112 billion, its net assets attributable to its parent company was RMB8.595 billion, its operating income in 2021 was RMB30.374 billion, and its net profit attributable to its parent company was RMB2.36 billion. 

Located in Nantong, Jiangsu Province, Jiangshan Agrochemical & Chemicals is an industry leader in the production of pesticides, such as glyphosate, with a production capacity of 70,000 tons of glyphosate technical per year, including a glycine-based production capacity of 30,000 tons and an IDAN-based production capacity of 40,000 tons. The company produces herbicides and insecticides, as well as special chemicals, chemical intermediates, chlor-alkali and new materials. In addition, it conducts research, development, production and supply of combined heat, power and steam. In the first half of this year, the company recorded a business income of RMB5.231 billion, an increase of 65.87% year-on-year, as well as a net profit attributable to its parent company of RMB1.213 billion, an increase of 295.1% year-on-year.

Why does a pesticide manufacturer step into the phosphorus chemical industry? In its investment objective statement, Jiangshan said that the move aims to meet the company’s strategic needs, which is to fully utilize its available resource advantages to complement its industry chain, therefore, enhancing its competitiveness and differentiated competitive advantage. The initiative will help establish its third production base following its Nantong and Zhijiang bases. 

According to Jiangshan Agrochemical & Chemicals, the company’s cooperation with Wengfu (Group) Co., Ltd., in jointly establishing a phosphorus chemical circular industry chain base within the Fine Chemical Industry Park at the Guizhou Weng’an Economic Development Zone is in line with the country’s strategy to encourage the coordinated development of Guizhou Province. The investment is expected to further enhance Jiangshan’s competitive edge and risk resistance capacity, supporting the company’s efforts to achieve its medium and long-term strategic goals of realizing healthy, sound and sustainable development.