Weifang Rainbow plans to issue shares to raise fund for several herbicide projects 07-18-2023

Summary: In late June, Weifang Rainbow announced that it planned to issue shares to raise a fund no more than USD340.52 million to construct projects including 8,000 t/a clethodim project, 60,000 t/a green continuous-process 2,4-D and 2,4-D-ethylhexyl project, 1,000 t/a clopyralid project and 1,000 t/a flumioxazin project.

In late June, Shandong Weifang Rainbow Chemical Co., Ltd. (Weifang Rainbow) published a prospectus for the issuance of A-shares to specific targets and listing on the ChiNext Market. The company has intended to raise no more than USD340.52 million (RMB2,457.12 million) through the share issuance, and the fund will be used to construct five projects and serve as supplementary working capital.

Table Planned investment in Weifang Rainbow's new projects
No. Project Investment, million USD Planned use of raised fund, million USD
1 8,000 t/a Clethodim project 110.60 101.68
2 60,000 t/a Green continuous-process 2,4-D and 2,4-D-ethylhexyl project 105.65 100.03
3 1,000 t/a Clopyralid project 25.34 23.89
4 1,000 t/a Flumioxazin project 36.05 34.02
5 Global operation digital management upgrade project 20.47 19.92
6 Supplementary working capital 60.99 60.99
Total 359.09 340.52

Source: Weifang Rainbow's prospectus concerning the issuance of A-shares filed in late June 2023

For the projects No.1 and No.2, Weifang Rainbow will make use of technologies and processes adopted in previous production of these products and its accumulated advanced technical fruits in recent years, and expand production capacity featured with green and continuous process. At present, the company has active capacity of 2,000 t/a clethodim TC, 25,000 t/a 2,4-D TC and 10,000 t/a 2,4-D-ethylhexyl TC. Once the two capacity expansion projects are completed, its capacity for clethodim TC will increase to 10,000 t/a, for 2,4-D TC to 65,000 t/a and for 2,4-D-ethylhexyl TC to 30,000 t/a.


As for the projects No.3 and No.4, since Weifang Rainbow has not yet mass produced the two herbicides TC, it cannot ensure smooth application of green technologies and continuous process on a large scale, and thus there are uncertainties of the time for full operation of the lines, the realisation of product specifications, etc.


According to Weifang Rainbow, the main reasons for investing the to-be-raised fund in pesticide TC projects are that its existing capacity for TC products is too small to satisfy its business needs and the product structure needs further improvement. If the large increases in its production capacity for clethodim TC and 2,4-D TC is finished, the company will have a strong boost in production efficiency, cost control and product quality, and it can better serve the market. Meanwhile, clopyralid and flumioxazin are two herbicides with quite good market potentials; new capacity for the two TC products will enrich the company's pesticide TC product mix. Besides, with its strength in the production of formulations based on the active ingredients, it will consolidate its advantage and overall competitiveness after extending its reach to the production of TC products.


Weifang Rainbow mainly engages in the R&D, production and sale of pesticide TC and formulation products. It has the capability to synthesise TC products and process formulation products for a variety of crop protection products covering herbicides, insecticides, fungicides, etc. Its main products are herbicide TC and formulation products based on the active ingredients of glyphosate, 2,4-D, atrazine and paraquat. So far, the company has established a complete business chain for R&D and production of pesticide TC and formulation products, as well as branding, distribution, marketing and other services that serve globally. As of 31 March, 2023, Weifang Rainbow had acquired 271 patents (241 Chinese patents and 30 overseas patents), which include 215 patents for invention (191 Chinese patents and 24 overseas patents).


More information can be found at CCM Herbicide China Monthly Report.

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