CCM: Guangxin Agrochemical to raise funds for new fungicide projects

  Source: Baidu

  According to this plan, Guangxin Agrochemical will issue ≤88.23 million A shares to no more than 10 specified shareholders, pricing at USD2.44/share (RMB16.31/share). The to-be-raised funds will be invested into the following projects:

  
Pyraclostrobin project (3,000 t/a)

  
•     Executor: Guangxin Agrochemical   

  
•     Total investment: USD73.57 million (RMB491.33 million), including USD61.77 million (RMB412.55 million) from the funds   

  
When the project is finished, the company will possess a production capacity of 3,000 t/a for pyraclostrobin TC. Products from this project can be not only sold, but also processed by the company itself for higher added-value, which will help boost the company's profit and expand product range. Still (by 2 Sept., 2016), the company was still applying for administrative approval for construction and environmental impact assessment.

  
Famoxadone project (1,200 t/a)

  
•     Executor: Guangxin Agrochemical   

  
•     Total investment: USD57.04 million (RMB380.90 million), including USD47.12 million (RMB314.71 million) from the funds   

  
Guangxin Agrochemical has been developing special pesticides based on phosgene (that is also a raw material for famoxadone) for years and now it possesses its own phosgene production base. By giving full play to these advantages, the new famoxadone project is expected to enrich the company's product mix and improve its competitiveness and profitability. Still (by 2 Sept., 2016), the company was still applying for administrative approval for construction and environmental impact assessment.

  
Famoxadone is not only jointly promoted by the Ministry of Agriculture of the People's Republic of China and the National Agro-Tech Extension and Service Centre, but also on the government purchase list of fungicides for controlling and preventing rice blast. At the moment, only a few domestic producers are able to produce famoxadone, working at small production capacities. This represents a huge market for domestic pesticide manufacturers.

  
o-Phenylenediamine cleaner production technology upgrading project (15,000 t/a)

  
•     Executor: Dongzhi Guangxin Agrochemical Co., Ltd. (Dongzhi Guangxin), a fully-owned subsidiary of Guangxin Agrochemical   

  
•     Total investment: USD27.24 million (RMB181.90 million), including USD22.92 million (RMB153.05 million) from the funds   

  o-Phenylenediamine is an important chemical intermediate for high-effective and low-toxic pesticides like carbendazim and thiophanate. According to CCM's research, Dongzhi Guangxin is now applying to a sodium sulfide reduction method which shows flaws like low conversion rate and large quantity of difficult-treating industrial waste water.

  After this upgrade, the company will shift onto producing through catalytic hydrogenation, a method that would improve the conversion rate, lower the production costs and reduce industrial wastewater, waste gases and residues from production (easily treated as well), which further enhances the company's production efficiency and competitiveness.

  
As of 2 Sept., following the construction approval the Cizhou Economic and Information Technology Committee, Guangxin Agrochemical was applying for environmental impact assessment.

  Combined heat & power project (24 MW)

  
•     Executor: Dongzhi Guangxin   

  
•     Construction site: northern part of Xiangyu Chemical Industrial Park, Anhui Province   

  
•     Total investment: USD60.13 million (RMB401.60 million), including USD47.84 million (RMB319.52 million) from the funds   

  
This project implies the installation of two sets of circulating fluidized bed boilers (130 t/h) and two extraction cum back-pressure steam turbines (12MW each), together with desulfuration / denitration facilities. This not only meets Dongzhi Guangxin's demand for heating loads in production and reduce expenses on electricity, but will also help in saving energy and protecting the environment, thus providing great social and economic benefits.

  
Still (by 2 Sept., 2016), the company was still applying for administrative approval for construction and environmental impact assessment.

  
Wharf construction project

  
•     Executor: Dongzhi Guangxin   

  
•     Total investment: USD25.69 million (RMB171.57 million), including USD21.30 million (RMB142.22 million) from the funds   

  
This project aims to supply raw material to Dongzhi Guangxin and reduce costs of product delivery. On 2 Sept., Guangxin Agrochemical obtained project approval for construction from the Development and Reform Commission of Cizhou City and the environmental impact assessment approval from the Environmental Protection Department of Cizhou City.

  R&D centre construction project

  
•     Executor: Guangxin Agrochemical   

  
•     Total investment: USD10.07 million – RMB67.26 million (USD8.54 million – RMB57.04 million from the funds)   

  
Guangxin Agrochemical will construct a R&D centre and purchase laboratory equipment in order to further integrate R&D and production as well as accelerate the mass production of R&D achievements. Still (by 2 Sept., 2016), the company was still applying for administrative approval for construction and environmental impact assessment.

  Guangxin Agrochemical's 6 new projects, based on the current market situation, industrial competition and the company's development strategy, support its main businesses and show great market potential and economic benefits. They can help optimize the company's product structure, upgrade production technologies and help the company capture a larger market share, which then would improve its market position, brand value, profitability and anti-risk capability.

  Guangxin Agrochemical's allocation scheme of the to-be-raised funds, 2016