CHINA MAY LOSE 43 PERCENT OF ITS GLYPHOSATE PRODUCTION CAPACITY...


After the recent completion of environmental compliance inspections related to phosphorous conducted in seven provinces in the Yangtze Economic Zone, 276 manufacturers were discovered to have non-compliance issues and are facing corrective actions and shutdowns.

The leading manufacturers discovered to have non-compliance issues produce 43% of the country’s glyphosate . Out of the top six manufacturers, only the Xingfa Group and Wynca haven't been affected.

According to the results, six out of the 276 manufacturers are involved in glyphosate production. As well as the already-suspended Guang’an Chengxin Chemical and Lion Agrevo (Jiangsu) that produce downstream formulations, the other four manufacturers have a total glyphosate production capacity of 310,000 tons, accounting for 43% of the country’s total glyphosate production capacity of 725,000 tons, as of the end of 2018.
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According to the requirements of the Chinese Ministry of Ecology and Environment, local governments must take the appropriate actions against non-compliant manufacturers, such as enforcing shutdowns, corrective actions and relevant upgrades, to facilitate industry restructuring. However, such actions could lead to China losing 43% of its glyphosate production capacity. It should also be noted that the four affected manufacturers rank in the top six positions in the industry in terms of production capacity.

In light of increasingly strict environmental compliance laws, the industry will become more concentrated and will be dominated by industry leaders with higher levels of environmental compliance. According to market statistics, the market share of the top five manufacturers was only 44% before 2013, but in 2018, this figure reached 73%.

In contrast to the four non-compliant manufacturers, the Xingfa Group and Wynca have made progress in terms of environmental regulatory compliance. The Xingfa Group, which ranks first in China and second in the world, has been making continuous investments to meet national regulatory requirements related to glyphosate production. In 2018, the group invested Yuan100 million to implement 25 pollution control measures.

Wynca pioneered a chlorine element-based recycling process with its own proprietary rights, which utilizes the positive interaction between glyphosate and organic silicon, to maximum resources in an environment-friendly manner.

According to market analysis, environmental compliance laws will remain strict on a long-term basis. Glyphosate production will continue to face stricter environmental compliance requirements, and industry concertation will further increase. Environmental compliance and capacity utilization will become the core requirements for competitiveness in the glyphosate industry. Therefore, industry leaders that continually invest in pollution control will become more competitive.

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