Source: Limin Chemical's website

On 20 March, 2016, Limin Chemical Co., Ltd. (Limin Chemical) announced to make a private placement for its high-efficient pesticide projects, basic raw material projects and replenishment in liquid capital. Altogether 3,275.43 shares will be issued to raise a fund of USD116.22 million (RMB759.90 million) for the upgrading of the company's knockout products and the supply of upstream raw materials. This investment is believed to further Limin Chemical’s leading position in China’s fungicide market. Also, “It allows us to further expand business and improve profitability, which makes us more competitive and carries forward the strategic goals,” said Limin Chemical.

Upgrading of leading pesticides and new profit growth

Limin Chemical intends to invest USD54.22 million (RMB354.51 million) of the fund into the high-efficient projects, including:
- Metam-sodium project: 20,000 t/a
- Propineb project: 5,000 t/a
- Difenoconazole project: 500 t/a
- Azoxystrobin project: 500 t/a

Propineb, metam-sodium and difenoconazole have been the company's leading fungicides for years. This expansion will make them more competitive by upgrading techniques and quality.

Azoxystrobin became off-patent in 2010 and is a new generic pesticide. It is broad-spectrum, targeted at many diseases caused by fungi, like powdery mildew, rust, scab, downy mildew, rice blast, etc. This leads to its expansion in fungicide market. Thus, it is the high time for Limin Chemical to develop azoxystrobin project for new profit growth and richer product structure.

Self-sufficiency in raw materials to reduce cost

Altogether USD52.21 million (RMB341.39 million) will be used in the basic material projects, including:
- Ethylenediamine project: 10,000 t/a
- 1, 2-Propylenediamine project: 5,000 t/a

The two, costing millions of dollars to purchase annually, are the major raw materials for the company's propineb and mancozeb fungicides. At present, there are still few 1, 2-propylenediamine and ethylenediamine manufacturers in China. The domestic supply are dominated by international chemical giants, such as BASF, and replenished by Shandong Lianmeng Chemical Group Co,. Ltd. Limin Chemical can extend its supply chain up to raw materials after the construction of the two projects. This will reduce the cost and guarantee the supply of raw materials.

Replenishment in liquid capital to ease operating pressure

Totally USD9.79 million (RMB64 million) will be added to the liquid capital. As the company's business expands, the need for operating capital and liquid capital will also grow. This replenishment can relieve pressure from operating capital shortage, reduce financial costs and enhance financial liquidity.

Limin Chemical is one of the leading fungicide enterprises in China. So far, its total capacity has reached 33,000 t/a. Specifically:

According to Limin Chemical, not only has it been the supplier for domestic pesticide formulation enterprises, like Shenzhen Noposion Agrochemicals Co., Ltd. and Zhejiang Heben Pesticide & Chemicals Co., Ltd., but also for some pesticide giants, like DuPont, Syngenta and Bayer CropScience. Moreover, over 60% of the company’s products are exported to Europe, Southeast Asia, Africa, America and the Middle East.

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Tag: Limin Chemical, fungicide

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