Xingfa Group: Shaping the future of green chemicals with ambition for global agrochemical markets

Date:09-13-2024

Hubei Xingfa Chemicals Group Co., Ltd. (″Xingfa Group" or the ″Group″) is one of the  standout success stories in the history of China’s chemical industry. 

Beginning as a small yellow phosphorus factory in 1984, the company has evolved over the past decades into a prominent player in the phosphorus chemical sector, and ranked for years among China’s top 500 companies. This growth narrative demonstrates as a fine example for the Chinese chemical industry’s transformation.

With a courage for innovation and an open cooperation approach, Xingfa Group has successfully made its way in the international markets, connecting local markets with global opportunities. The company pioneered the ″Hydro power + Mining + chemical manufacturing″ model, serving customers in 116 countries and regions across the world, and boasts the world's second-largest glyphosate production capacity while leading the industry in environmental technology. Today, amidst global economic uncertainties and cyclical industry challenges, Xingfa Group is actively implementing innovation-driven strategies, aiming for a new chapter in developing its fine chemicals and the global agrochemical industry with outstanding competitiveness and sustainability.

This article will explore Xingfa Group’s technological innovations, product developments, international expansion, and sustainability strategies, analyzing how the company navigates challenges like market fluctuations, environmental pressures, and technological advancements. This narrative not only showcases the development trajectory of a single enterprise but also reflects the growing importance of China’s agrochemical industry in the global market.

Xingfa Group: A leader in the fine phosphorus chemical sector

Aerial view of Xingfa Group’s Yichang New Materials Industrial Park

As a leader in China’s fine phosphorus chemical sector, Xingfa Group displays exceptional innovation capabilities and significant market influence. The Group comprises one listed company, 65 subsidiaries, and 39 associated companies, employing over 15,000 people. Due to its impressive operational performance, Xingfa Group has been recognized among top 500 Chinese companies for nine consecutive years, holding the 410th position. Its listed entity ranks 427th in the 2023 Fortune China 500.

The trajectory of Xingfa Group exemplifies the transformation and upgrading of China’s chemical industry. From its beginnings as a small yellow phosphorus factory in the 1980s, the company has achieved leapfrog growth through concentric diversification and a focus on related industries. In 1999, Xingfa Group went public on the Shanghai Stock Exchange. The company has innovatively integrated hydropower and mineral resources, pioneering the ″hydropower + mining + chemical manufacturing″ development model in China.

Since 2001, Xingfa Group has actively pursued a global expansion strategy, establishing multiple domestic and international production bases. The Group has developed seven core industries, including phosphorus-sulfur chemicals, organosilicon, electronic chemicals, new energy, pesticides, fertilizers, and tourism, with product lines spanning eight categories to meet diverse market needs.

Xingfa Group’s product line

Xingfa Group’s international business landscape

In 2023, Xingfa Group’s sales revenue exceeded RMB 60 billion, with notable performance in overseas markets. The company's exports experienced significant growth in the first half of 2024, reflecting its sustained potential for international market expansion.

Leveraging its advantages across the entire industry chain, Xingfa Group is reshaping the global agrochemical landscape

With the continuous rise in global population and frequent outbreaks of pests and diseases, pesticides are becoming increasingly crucial for ensuring global food security. Recognizing this, Xingfa Group has heavily invested in the pesticide sector, striving to become a world-leading herbicide supplier. By capitalizing on its resource advantages across the entire industry chain and adhering to principles of efficiency, safety, and environmental responsibility, the company is committed to developing cost-effective, safe, and high-quality agrochemical products that enhance global agricultural quality and yield.

Currently, Xingfa Group operates four agrochemical production bases and six factories worldwide. The bases are in Xiaoting Industrial Park and Yidu Industrial Park in Yichang City, Hubei; Wuda Industrial Park in Wuhai, Inner Mongolia; and Jakarta, Indonesia. The production units include Hubei Trisun Chemicals, Hubei Xingchen Technology, Inner Mongolia Xingfa Technology, Inner Mongolia Xinnongji Technology, Hubei Jiaxing Chemical, and Xingfa AMCO in Indonesia. Additionally, the company maintains long-term cooperative tolling plants in overseas markets. 

Xingfa Group’s primary products include herbicides such as glyphosate (series), 2,4-D, MCPA, paraquat (series), nicosulfuron, imazethapyr, and imazamox. The company ranks first domestically and second globally in organic phosphorus herbicides. Notably, its glyphosate production capacity reaches 230,000 tons annually, securing its leadership in China and the global market. The green and efficient synthesis processes employed by Xingfa Group not only address significant environmental challenges but lead to cost control and clean production nationally, making it one of the first companies to pass environmental reviews for glyphosate. The planned introduction of new product lines, such as glufosinate-P and pyroxasulfone, is expected to expand its agrochemical portfolio further and enhance its influence in the industry.

Internationally, Xingfa Group has established overseas platforms for warehousing, distribution, and production processing. Key overseas platforms include Xingfa USA, Xingfa Wenda Brazil, Xingfa Europe, AMCO Indonesia, Xingfa Argentina, and Xingfa Hong Kong. These platforms engage in product sales, production processing, and market expansion tailored to their respective regions, providing solid support for the Group’s globalization strategy.

Confronting adversities, Xingfa Group demonstrates an exceptional development resilience

In light of the complex and volatile international economic environment, the global pesticide industry is experiencing a cyclical downturn, facing various challenges such as extreme weather, geopolitical tensions, economic recession threats, and crises, all adding considerable uncertainty to the industry’s future. Despite these difficulties, Xingfa Group has demonstrated remarkable resilience by implementing strategic measures to secure the stability and safety of its industrial chain.

Firstly, Xingfa Group prioritizes consolidating its development foundation, bolstering its capacity to withstand market fluctuations. The company continues to deepen its core business, leveraging its resource advantages and integrated production capabilities to improve operational efficiency and management practices, effectively reducing costs and enhancing competitiveness. At the same time, it has made ongoing investments to ensure the quality of its pesticide products and in application research and development, maintaining its brand leadership and market reputation.

Secondly, Xingfa Group's proactive approach to business expansion emphasizes precise risk management and deepens international cooperation. In response to de-globalization trends, the company has accelerated its overseas expansion. Given China’s pesticide industry's export-oriented nature, a global market sales strategy is crucial. Xingfa Group has strategically focused on the US and Brazil, the largest agrochemical markets.

In the US, Xingfa Group began carefully planning its local formulation processing and distribution business in 2017. Following the U.S.-China trade war in 2018, the company swiftly adjusted its strategy to advance local processing and distribution projects. The subsequent COVID-19 pandemic and Bayer’s factory shutdown resulted in supply shortages in the U.S. market, providing Xingfa USA with rapid business and market growth opportunities. Currently, Xingfa USA is broadening its product portfolio and adding the supply of core herbicide varieties such as paraquat and 2,4-D, offering diverse options for customers.

In Brazil, Xingfa Wenda, a subsidiary of Xingfa Group, secured glyphosate technical registration in 2018, becoming the first Chinese glyphosate manufacturer to achieve this independently. The company’s business development in Brazil adheres to three main principles: strict compliance with local regulations, maintaining brand image through integrity, and fostering win-win cooperation through partnership. Presently, the company primarily conducts B2B business in Brazil, establishing strong long-term partnerships with multinational corporations and leading local companies.

Globally, Xingfa Group is not only focusing on the U.S. and Brazilian markets but is also continuously expanding its international business footprint. The Group has acquired a controlling stake in a paraquat and glyphosate formulation production facility in Indonesia, established a subsidiary in Argentina, and is preparing to set up Xingfa Australia and Xingfa Banagro Ghana.

Aqueous products on the Xingfa Group production line

Looking ahead, Xingfa Group aims to vigorously enhance its overseas industrial layout. Key initiatives include expanding projects in Indonesia to establish a manufacturing base in Southeast Asia, accelerating the construction of overseas warehousing and distribution facilities for more convenient and risk-controlled business models for local distributors and customers, continuing to develop overseas subsidiaries and third-party processing collaborations, and diversifying pesticide categories around core herbicide products to strengthen its overall product offerings, to advance its globalization strategy comprehensively. Through these efforts, Xingfa Group is committed to providing more effective, diverse, and high-quality products and services to global partners and customers, demonstrating its strategic vision and execution capabilities as an industry leader.

Commitment to innovative transformation: Developing new quality productive forces and practicing sustainable development concepts

In response to global challenges such as environmental pollution, resource consumption, and industrial upgrades, Xingfa Group shows a firm resolve for innovation-driven transformation. The Group focuses on cultivating new quality productive forces while emphasizing compliance and sustainable development, vigorously promoting carbon and emission reduction, and adhering to long-term goals to proactively address industry changes.

Innovation serves as the driving force behind the company's development. The establishment of the Hubei Three Gorges Laboratory has brought together a research team of 417 members dedicated to advancing technological breakthroughs, mastering key technologies for electronic-grade chemicals. The clean production technology for yellow phosphorus has been recognized as a national energy efficiency leader in critical industries for 11 consecutive years.

Hubei Three Gorges Laboratory led by Xingfa Group

Researchers conducting experiments

Xingfa Group continuously optimizes its product and industrial structure, developing high-quality food-grade and pharmaceutical-grade products. It is becoming an enterprise with China’s most comprehensive range of fine phosphorus products. Its high-end phosphates are world-leading, with sodium hypophosphite successfully entering Japan’s high-end semiconductor sector and dimethyl sulfoxide achieving the highest production and sales volume in the global carbon fiber sector.

Under a strategy prioritizing eco-friendly development, Xingfa Group has upgraded and expanded its environmental protection facilities, resulting in a 30% reduction in overall emissions and achieving over 95% utilization of waste residue, wastewater, waste heat, and waste gas. Its pioneering ″hydropower+ mining + chemical manufacturing″ model has achieved integrated development across phosphorus, silicon, salt, and sulfur, creating a diversified development pattern integrating upstream and downstream processes and associated industries. The coupling and integration of various processes allows by-products to be converted into raw materials for other processes, establishing a national demonstration park for circular economy transformation.

Digital transformation is crucial for Xingfa Group to enhance efficiency. The Group adopts a ″data + platform + application″ model to drive its digital transformation. It has established DCS automation systems and automated production lines and achieved real-time data collection and remote equipment monitoring by integrating IoT technology, enabling comprehensive management of ″people, machines, materials, methods, and environment.″ The Group is also vigorously promoting the integration of new-generation information technologies such as AI, 5G, and big data with industrial development.

Xingfa Group’s workshop

ESG (Environmental, Social, and Governance) efforts are essential for sustainable social and environmental development, as well as the long-term growth of companies. Xingfa Group fully recognizes this importance and has integrated the ESG concept into its corporate strategy. The company aligns closely with the national goals of ″carbon peak and carbon neutrality,″ establishing a leadership team dedicated to carbon emissions management and embedding sustainable development principles throughout its operations. Since 2021, Xingfa Group has voluntarily published ESG reports for three consecutive years and has independently released greenhouse gas verification reports, carbon footprint assessments, and product life cycle assessment reports for several subsidiaries. In its emissions reduction efforts, the company prioritizes clean energy and has increased investments in wind and solar power, projected to reduce CO2 emissions by over 400,000 tons. In recent years, Xingfa Group has made substantial investments in environmental protection technology, driving green innovation to ensure that sustainability and ecological protection develop in tandem.

Xingfa Group has not only achieved notable successes in environmental protection and technological innovation but has also shown a solid commitment to social responsibility. In 2023, the company donated RMB 22.07 million to charitable initiatives, bringing its total donations over the past three years to more than RMB 210 million. The company has supported various projects, including constructing a photovoltaic power station to bolster the collective economy of Zhaojun Village and assisting the medicinal herb industry in Shukongping Village, thereby promoting the growth of local traditional green industries.

Looking ahead, Xingfa Group will continue to implement the ESG concept, adopting a more open approach to solicit topics of interest from stakeholders and actively practicing them, striving to achieve the best practices in the industry and contributing to the sustainable development of the agrochemical industry. Through these initiatives, Xingfa Group will not only fulfill its social responsibilities but also drive the entire industry chain toward a more sustainable direction, collaboratively fostering a harmonious society.

Conclusion

The story of Xingfa Group represents not only its developmental journey but also mirrors the transformation and upgrading of China’s chemical industry as it integrates into the global market. Amidst a complex and volatile international landscape and various industry challenges, the resilience and insight exhibited by Xingfa Group offer valuable reference and inspiration for companies within the sector and beyond.

Looking to the future, the development direction of the agrochemical industry is clear: more efficient, more environmentally friendly, and more sustainable. This evolution requires agrochemical companies to innovate and develop smarter, more targeted products continually. The integration of digital technology is poised to bring revolutionary changes to the agrochemical industry. In this context, companies like Xingfa Group will not only define their futures but also influence the broader trajectory of the entire industry.

Finally, it is crucial to recognize that the development of the agrochemical industry transcends mere technological and economic considerations; it is fundamentally linked to human well-being. Each advancement paves the way for a brighter future for our planet and future generations. We look forward to Xingfa Group continuing to create more success stories on the global chemical stage, delivering greener, more efficient, and more sustainable chemical products and services to the world, and embracing a more prosperous and harmonious future together.

This article was originally published in AgroPages magazine 2024 Latin America Focus. Download to read more.