Zhida Chemical Seeks Further Market Expansion Based on High-quality CCMP

The product - 2-chloro-5-chloromethylpyridine (CCMP)—is a key intermediate among the new and highly effective pesticides, including imidacloprid, acetamiprid and nitenpyram. 

 

As the quality of CCMP directly affects the product quality of imidacloprid and other TCs, the manufacturers of imidacloprid have very strict requirements when it comes to the quality of the incoming CCMP. 

 

Yancheng City Zhida Chemical Co., Ltd., by virtue of its outstanding production technology and product quality, has gained a foothold in the pesticide intermediate segment in just a few years. 

 

It was established in May 2012 and started its operation in July 2014. The main product of Zhida Chemical is CCMP, which is mainly sold to Jiangsu Yangnong Chemical Group Co., Ltd., Jiangsu Changqing Agrochemical Co., Ltd., Jiangsu Changlong Agrochemical Co., Ltd. and other large enterprises in China and exported to Europe, America, India and Brazil. 

 

Since its inception, Zhida Chemical has been insisting on the principle of quality first. By increasing the generally recognized purity of 93 percent to 95 percent, Zhida Chemical set off the revolution in the purity of CCMP and successfully occupies the intermediate market. Just in 2016, Zhida Chemical's annual gross output value reached $27 million.

 

 

Li Bo, the founder of Zhida Chemical, has nearly two decades of experience in the CCMP segment and is fully aware that the quality of CCMP can directly affect the quality of downstream products, including imidacloprid, acetamiprid and other TCs to a large extent. 

 

Previously, the dominant production process for CCMP used 3-methyl pyridine as the feedstock, which is commercially available and cheaply priced. However, this production process will produce about 1/4 of the 2-chloro-3-methylpyridine, and the separation is not complete enough, which is the main reason leading to low CCMP purity. 

 

As a result, Zhida Chemical has set the goal to provide the market with high-purity CCMP since its establishment, and successfully increased the generally recognized purity of 93 percent to 95 percent in just a few years, which firms the position of Zhida Chemical in the CCMP intermediate segment.  

 

As a rising star in the CCMP segment, the CCMP production process used by Zhida Chemical is completely different from those used by other manufacturing enterprises. Zhida Chemical's process is unique in the world. Compared with other processes, it can not only effectively improve the purity of the product, but also reduce the production cost of the product to some extent. At present, the purity as specified in the company standard of Zhida Chemical is as high as 97 percent, and it can be up to 99.5 percent or more according to the normalization method. 

 

CCMP as a pesticide intermediate can be found in a wide range of downstream products, including insecticides, such as imidacloprid, acetamiprid and nitenpyram, highly efficient herbicides, such as haloxyfop-R-methyl and fungicides, such as fluopicolide. Some of these products are green agrochemicals, and CCMP, as an upstream material, will for sure continue to play its role. "So I think CCMP's lifeline is still long. I am optimistic about the development of the product in the next few years," said Zhida Chemical Founder, Li Bo.

 

 

Since its inception, Zhida Chemical has been actively committed to the development of new products and the collection of old ones, the research and exploration of domestic and foreign markets to well known and the latest development in products and markets, which is applied as the guide for production and in its import and export trade. 

 

Zhida Chemical always adheres to the operation concept of "quality products, competitive price and satisfactory service," and after years of steady development, Zhida Chemical has won the trust of customers with its high quality products and good reputation. Zhida Chemical's products are well sold in more than 40 countries and regions, and the company has established a long-term agency relationship or partnership with wholesalers and end customers all over the world, forming a solid network for suppliers, traders and end-users. 

 

At present, Zhida Chemical has established a strategic cooperative relationship with domestic and overseas companies represented by Yangnong Chemical and Excel. The cooperation between Zhida Chemical and Yangnong Chemical can be dated back to November 2015. It is well known that Yangnong Chemical is always devoted to producing high quality imidacloprid TC, and has high requirement for the quality of outsourced CCMP. 

 

Besides the requirement for purity, Yangnong Chemical conducts a rigorous analysis of the contents of impurities in CCMP. Zhida Chemical passed such a harsh test and became a strategic partner of Yangnong Chemical. Just in 2016, the goods purchased by Yangnong Chemical from Zhida Chemical amounted to $15 million. 

 

After Nufarm sold its 14.69 percent stake in Excel Crop Care, the fifth largest agrochemical company of India, to Sumitomo Chemical in October 2016, the latter's stake in Excel was increased to 59.67 percent. At this point, Li Bo of Zhida Chemical was quick to be aware that after the acquisition by Sumitomo Chemical, the pesticide business of Excel would expand quickly and the procurement of intermediates would be unavoidable. Zhida Chemical did not hesitate to contact Excel for cooperation. It was not long before Ninad D. Gupte, the managing director of Excel, visited Zhida Chemical to discuss cooperation, and ended up with the establishment of strategic cooperation between the two companies. 

 

Besides Excel, Zhida Chemical also has a good relationship of cooperation with a lot of Indian companies. It is expected Zhida Chemical's market share in this region will achieve greater growth.

 

In recent years, CCMP has been in short supply due to a series of events, such as the stringent environmental supervision and reduction of overcapacity, and the price has nearly doubled from $ 10,162 per ton in January 2016 to $18,820 per ton recently. Although the product's market price continues to rise, some of the CCMP manufacturers are quitting due to unacceptable pollution control, increasingly stringent environmental policy and other factors, leaving only a few large enterprises, such as Zhida Chemical, the largest manufacturer of CCMP in Asia, in the market. 

 

In recent years, Zhida Chemical has invested a lot of money to improve the production process of CCMP, and now the CCMP products of Zhida Chemical are all manufactured with the state-ofthe-art production equipment, which greatly improves production yield, reduces the processing of wastewater and guarantees product supply capability. 

 

When it comes to the development direction of the company in the future, Li Bo said Zhida Chemical will focus on three aspects, which are as follows: 
 

- To further upgrade the purity of CCMP to an extreme. Presently, all CCMP products produced by Zhida Chemical have a purity of 95 percent. By 2018, the company will phase out such grade of products and start producing CCMP products with a purity of 96 percent on a large scale. Zhida Chemical has always been committed to providing customers with higher quality CCMP products to help improve customers' product yield and product quality. The CCMP products with higher purity to be launched in 2018 will establish a new benchmark in the CCMP intermediate segment. 

 

- To actively expand into the CCMP downstream agrochemicals. Besides continuing to upgrade the purity of CCMP, Zhida Chemical is  actively expanding into the CCMP downstream products, namely 2,3-dichloro-5-(trifluoromethyl) pyridine, an intermediate for haloxyfop-R-methyl and fluazinam, and 2-aminomethyl-3chloro-5-(trifluoromethyl) pyridine, an major intermediate for fluopicolide. Up to now, the installation works for the 2,3-dichloro5-(trifluoromethyl) pyridine project, which has been finished and the equipment commissioning works will be started as planned, and the 2-aminomethyl-3-chloro-5-(trifluoromethyl) pyridine project is in the stage of environmental impact assessment approval. Zhida Chemical will focus on the development of CCMP and its downstream products and realize the objective of better quality, greater output and a broader market. 

 

- To be open-minded and seek healthy development of the industrial chain. Though it is not long since its inception, Zhida Chemical, by virtue of its advanced production technology, excellent product quality and stable production capacity, has earned a good reputation in the CCMP segment and established a good cooperation relationship with domestic and foreign enterprises. Li Bo hopes to cooperate with more high-quality enterprises, extend the company's existing intermediate products to the downstream ones, forge a healthy product line and bring more competitive products to the market.