CCM Data & Primary Intelligence

Production and Market of Chlorpyrifos in China

A Preliminary Study

Researched & Prepared by:

Guangzhou CCM Information Science and Technology Co., Ltd

Guangzhou, P. R. China

August 2008

Copyright by Guangzhou CCM Information Science and Technology Co., Ltd (P. R. China) Any publication, distribution or copying of the content in this report is prohibited. Website: http://www.cnchemicals.com Tel: +86-20-3761 6606 Fax: +86-20-3761 6968 Email: econtact@cnchemicals.com

Website: http://www.cnchemicals.com Email: econtact@cnchemicals.com Tel: +86-20-3761 6606 Fax: +86-20-3761 6968

CCM Data & Primary Intelligence

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Description:

Chlorpyrifos, a broad-spectrum organophosphorus insecticide with its sales volume ranking first in the world, has the effects of contact killing, stomach poisoning and certain fumigant killing against many kinds of pests. At present, Dow Chemical Company is the largest producer of Chlorpyrifos technical, with the production capacity of 50,000t/a in 2004. China started the production of Chlorpyrifos technical in the 1990s. However, before 2007, overseas Chlorpyrifos, mostly from Dow's Chlorpyrifos, had captured a large market share in China for a long time, over 25% of the total in 2006. Since 2007, the capacity and output of domestic Chlorpyrifos technical have soared in China to scales of tens of thousand tons per year. The homemade Chlorpyrifos has not only replaced imported Chlorpyrifos in the domestic market but also entered the overseas market. What great changes have been made to Chinese Chlorpyrifos industry in 2006~2007? You can find the answer in this report. Despite the rapid growth of domestic Chlorpyrifos industry, the operation rate of Chlorpyrifos technical producers in China has been rather low, around 40% in recent years. Why the operation rate of Chlorpyrifos technical producers has been so low in recent years? What problems are Chinese Chlorpyrifos producers facing now? What is the consumption situation of Chlorpyrifos in China? These problems are also disclosed in the report.

Main content:

No. Content Page

Executive summary 5

Introduction and methodology 8

I Pesticide industry in China 11

I-1 Overview of the pesticide industry in China 11

I-2 Position of Chlorpyrifos in Chinese insecticide industry 15

II Supply & demand of Chlorpyrifos in China 16

II-1 Historic development of Chlorpyrifos in China 16

II-2 Production technology of Chlorpyrifos in China 18

II-3 Current production situation (capacity, output, species, major producers, growth 21

II-3.1 Summary of Chlorpyrifos technical production 21

II-3.2 Summary of Chlorpyrifos formulations production 30

II-4 Supply situation of raw materials in China 35

II-5 Price of Chlorpyrifos in China 38

II-6 Registration situation of Chlorpyrifos in China in recent years 40

II-7 Restriction on the use of Chlorpyrifos in foreign countries 43

II-8 Import & export situation of Chlorpyrifos in China in 2007 44

CCM Data & Primary Intelligence

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II-8.1 Import situation 44

II-8.2 Export situation 44

II-9 Demand for Chlorpyrifos in China 54

II-9.1 Consumption of Chlorpyrifos technical 55

II-9.2 Use of Chlorpyrifos formulations 55

- Regional distribution 55

- Use pattern 56

II-10 Competitiveness landscape 60

III Forecast on the Chlorpyrifos industry in China (~2013) 62

III-1 Key factors and driven forces in the development of Chlorpyrifos in China 62

III-2 Supply and demand forecast in 2008-2013 63

IV Conclusion 65

V Appendix: Profile of major active manufacturers of Chlorpyrifos 66

V-01 Nanjing Redsun Co., Ltd. 66

... 0

V-17 Jiangsu Kwin Group 84

Executive summary:

(Note: The following summary is based on the situation in 2008 and maybe different to what it is

nowadays. Please be noted.)

China has become one of the major suppliers of Chlorpyrifos in the world since 2007. And the supply of

3,5,6-Trichloropyridin-2-ol sodium (TCP) in China, an important intermediate of Chlorpyrifos, which

mainly depended on import previously, has achieved complete self-sufficiency since 2007. At present,

Chinese Chlorpyrifos producers have begun to explore the overseas market.

- Production technology

Thanks to the advanced production technology of TCP in the second half of 2006, the domestic supply

of TCP has been increasing since then, which has ensured the stable production of Chlorpyrifos.

What’s more, the use of domestic TCP has largely cut down the production cost of Chlorpyrifos

technical, leading to the lower price of domestic Chlorpyrifos, which directly results in the shrinking

market share of overseas Chlorpyrifos in China.

- Production situation of Chlorpyrifos in China

With the progressing production technology of TCP, China has become one of the major Chlorpyrifos

producers in the world and domestic Chlorpyrifos has dominated the Chinese market. Howerver the

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operation rate of most Chlorpyrifos technical producers is rather low, around XXXX%, though the

market of domestic Chlorpyrifos technical has been opened. There are mainly 17 active producers of

Chlorpyrifos technical, with the total capacity of XXXXt/a as of Aug. 2008. At present, Nanjing Redsun

is the largest producer of Chlorpyrifos technical in China.

- Import and export situation of Chlorpyrifos

Chinese Chlorpyrifos technical producers have been gradually exploring the overseas market since

2007. The total export volume of Chlorpyrifos technical is XXXX tonnes in 2007, and XXXX tonnes in

1H 2008, a XXXX% year-on-year growth rate. Nanjing Redsun is the largest exporter of Chlorpyrifos

technical and formulation in China.

- Price of Chlorpyrifos

With the technology improvement and the capacity expansion of domestic Chlorpyrifos producers, the

price of Chlorpyrifos technical (100%) in 2004~2007 has steadily decreased in recent years. The

Chlorpyrifos technical price declined most rapidly in 2007, as the TCP production technology of most

domestic producers of Chlorpyrifos technical and TCP has achieved great progress. However, since

the 2HF of 2007, the price of Chlorpyrifos has increased with the price rise of the raw material. And it

has reached RMB 55,000/t (7,971USD) in May 2008

- Domestic demand for Chlorpyrifos

In recent years, domestic consumption of Chlorpyrifos has been increasing, calculated by AIs, with the

CAGR of XXXX% in 2005~2008. Thanks to the price decline of Chlorpyrifos in 2007, coupled with the

prohibition of the 5 highly toxic organophosphorus insecticides, domestic consumption of Chlorpyrifos

has soared since 2007, increasing to XXXX tonnes, up by XXXX% over the previous year.

......

Character of CCM' Report:

The aim of this report is to provide powerful assistance to the strategy group and the management team in making correct decision as how to penetrate the ever-increasing China market and how to catch the maximum commercial opportunities. The report is formulated independently by CCM’s professional market researchers, based on the first-hand and primary data which are analyzed by scientific methodology, confirmed with both manufacturers/end users/traders and legal authorities, and presented in a logic way.

Sample pages：

II-2 Production technology of Chlorpyrifos in China In terms of the different synthesis methods TCP, an intermediate of Chlorpyrifos, the production technology of Chlorpyrifos technical can be classified into 2 routes, xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ………. Table II-2-1The comparison between trichloro-acetyl chloride route and pyridine route in the production of TCP

Route Item

Trichloro-acetyl chloride Pyridine

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx Advantages xxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxx Disadvantage

s xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

x xxxxxxxxxxxxxxxxxxx

Table II-2-2 The raw material, solvent and catalyzer of the 3 synthesis methods of Chlorpyrifos

Item Organic solvent method Bi-solvent method Aqueous phase method

Key raw

material xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Solvent xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxx

Catalyzer xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Table II-2-3 The cost of raw materials in the production of Chlorpyrifos using trichloro-acetyl chlorid as the starting raw material, by aqueous phase method, as of August 2008

No Item Unit consumption (t/t) Price (RMB/t) Cost (RMB/t)

1 xxxxxxxxxxxxxxxxxxxxxxxxx xxxx xxxxxx xxxxx

2 xxxxxxxxxxxxx xxxx xxxxxx xxxxx

3 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

x xxxx xxxxxx xxxxx

4 Others xxxxx

5 Total xxxxxx

II-3 Current production situation (capacity, output, species, major producers, growth rate (2003~2007), etc.) Table-3.1-1 Capacity distribution situation of major active producers of Chlorpyrifos technical in 2008

No. Capacity (100%, t/a) Number of producer Share

1 Over 10,000 x xxxxx

2 5,000 x xxxx

3 1,000~3,000 xx xxxxx

4 Less than 1,000 x xxxxx

Total xx xxxxxx

Table II-3.1-3 Capacity and output of major Chlorpyrifos technical producers in China as of Aug. 2008

No. Abbr. Status'08 Launch time Cap. '07

(t/a)

Cap. as

of Aug. 08

(t/a)

Output

'07 (t)

Output

1HF 2008

(t)

Operation

rate '07

VI-01 xxxxxxxxxxxxxx xxxxxx xxxxx xxxxx xxxxxx xxxxx xxxxx xxxxxx

VI-02 xxxxxxxxxxxxxxxxxx xxxxxx xxxx xxxxx xxxxxx xxxxx xxxxx xxxxxx

VI-03 xxxxxxxxxxxxxxxx xxxxxx xxxx xxxxx xxxxx xxx xxxxx xxxxxx

VI-04 xxxxxxxxxxxxxx xxxxxx xxxxxxxxxxxxxxxxx xxxxx xxxxx xxx x xxxxxx

VI-05 xxxxxxxxxxxxxxxx xxxxxx xxxxxx xxxxx xxxxx xxx xxx xxxxxx

VI-06 xxxxxxxxxxxxx xxxxxx xxxx xxxxx xxxxx xxx xxx xxxxxx

VI-07 xxxxxxxxxxxxxx xxxxxx xxxx xxxxx xxxxx xxx xxx xxxxxx

VI-08 xxxxxxxxxxxxxxxxx xxxxxx xxxx xxxxx xxxxx xxx xxx xxxxxx

VI-09 xxxxxxxxxxxxxxx xxxxxx xxxxxxxxxxxxxxxxx xxxxx xxxxx xxx xxx xxxxxx

VI-10 xxxxxxxxxxxxxxxx xxxxxx xxxx xxxxx xxxxx xxx x xxxxxx

VI-11 xxxxxxxxxxxxxx xxxxxx xxxx xxxxx xxxxx xxx xxx xxxxxx

VI-12 xxxxxxxxxxxxxxx xxxxxx xxxxx xxxxx xxxxx xxx xxx xxxxxx

VI-13 xxxxxxxxxxxxxxxx xxxxxx xxxx x xxxxx x xxx x

VI-14 xxxxxxxxxxxx xxxxxx xxxx xxx xxx xxx xxx xxxxxx

VI-15 xxxxxxxxxxxxxxxxxxx xxxxxx 2008 0 500 0 200 x

VI-16 xxxxxxxxxxxxxxxxxx xxxxxx xxxx xxx xxx xx xx xxxxxx

VI-17 xxxx xxxxxx xxxx xxx xxx xx xx xxxxxx

1 xxxxxxxxxxxxxxx xxxx xxxx xxxxx x xxx x xxxxxx

2 xxxxxxxxxxxxx xxxx xxxxx xxxxx x xxx x xxxxxx

3 xxxxxxxxxxxxxxx xxxx xxxxxx xxxxx x xxx x xxxxxx

4 xxxxxxxxxxxxx xxxx xxxxxx xxx x xx x xxxxxx

5 xxxxxxxxxxxxxx xxxxxxx xxx xxx x xx x xxxxxx

6 xxxxxxxxxxxxx xxxxxxx xxxx x x x x x

7 xxxxxxx xxxxxxx xxxxx xxxxx x xxx x xxxxxx

8 xxxxxxxxxxxxxxx xxxxxxx xxx xxx x xx x xxxxxx

9 xxxxxxxxxxxxxxxxx xxxxxxx xxxx xxx x xx x xxxxxx

10 xxxxxxxxxxxxx xxxxxxx xxxx x x x x x

11 xxxxxxxxxxxxxxx xxxxxxx xxxxxxxxxxxxxxxxx x x x x x

12 xxxxxxxxxxxxxxxxx xxxxxxx xxxx xxx x xxx x xxxxxx

13 xxxxxxxxxxxxxxxxx xxxxxxx xxxx x x x x x

xxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx

II-3.2 Summary of Chlorpyrifos formulation production At present, there are mainly 2 Chlorpyrifos formulations including 40% Chlorpyrifos EC and 480g/L Chlorpyrifos EC in China. In order to reduce the price of Chlorpyrifos formulation and expand the domestic market, many mixed formulations of Chlorpyrifos have been developed. The market share of such formulations has been increasing in China in recent years. ………. II-4 Supply situation of raw materials in China Table II-4.1-1 The major TCP producers in China in 2008 No. Company Abbr. Location Route Capacity ’08 (t)1 xxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxxx xxxxxxxx xxxxxx

2 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxx xxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx xxxxx

3 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxx xxxxxxxxxxxxxxxxxxxxxxxx xxxxx

4 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxx xxxxxxxxxxxxxxxxxxxxxxxx xxxxx

5 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx xxxxx

6 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxx xxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx xxxxx

7 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx xxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx xxxxx

8 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx xxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx 2,000

Total xxxxxx

Table II-4.1-2 The major trichloro-acetyl chloride producers in China in 2008

No. Company Abbr. Location Capacity ‘08

1 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxx xxxxxx xxxxx

2 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx xxxxxxxx xxxxx

3 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxx xxxxx

Total xxxxxx

II-8 Import & export situation of Chlorpyrifos in China in 2007 ………. Table II-8.2-1 Export price of Chlorpyrifos in 2007 (Quantity: tonne, Price: USD/kg, Value: USD)

40% EC 480g/L EC Tech. Month

Quantity Price Quantity Price Quantity Price Value

Jan-07 xxxxxx 3.41 xxxxxx xxxx xxxxxx xxxx xxxxxxx

Feb-07 xxxxxx 3.68 xxxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Mar-07 xxxxxx 3.69 xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Apr-07 xxxxxx 3.55 xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

May-07 xxxxxx xxxx xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Jun-07 xxxxxx xxxx xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Jul-07 xxxxxx xxxx xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Aug-07 xxxxxx xxxx xxxxx xxxx xxxxxx xxxx xxxxxxx

Sep-07 xxxxxx xxxx xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Oct-07 xxxxxx xxxx xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Nov-07 xxxxxx xxxx xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Dec-07 xxxxxx 3.69 xxxxxx xxxx xxxxxxx xxxx xxxxxxxxx

Total xxxxxxx xxxx xxxxxxx xxxx xxxxxxxxx xxxx xxxxxxxxxx

II-9 Demand for Chlorpyrifos in China At present, Chlorpyrifos has been one of the most widely used insecticides in China. It is mainly applied to rice, fruit tree, vegetable, tea, etc. Chlorpyrifos has also been used in the control of underground pest, ectozoas of domestic animals and public health pests. ………. Table II-9.1-1 The consumption situation of Chlorpyrifos technical in active producers in China in 2007 (Unit: tonne)

No. Producer Used by

itself Export

Sold in domestic

market Total

VI-01 xxxxxxxxxxxxxx xxx xxxxx xxx xxxxx

VI-02 xxxxxxxxxxxxxxxxxx x x xxxxx xxxxx

VI-03 xxxxxxxxxxxxxxxx xxx xxx xxx xxx

VI-04 xxxxxxxxxxxxxx 350 17 xxx xxx

VI-05 xxxxxxxxxxxxxxxx xx xx xxx xxx

VI-06 xxxxxxxxxxxxx xxx x xxx xxx

VI-07 xxxxxxxxxxxxxx xxx xxx xxx 900

VI-08 xxxxxxxxxxxxxxxxx xxx xx xxx xxx

VI-09 xxxxxxxxxxxxxxx 300 73 xxx xxx

VI-10 xxxxxxxxxxxxxxxx 180 3 xxx xxx

VI-11 xxxxxxxxxxxxxx 160 0 xxx xxx

VI-12 xxxxx xxx x xxx xxx

VI-13 xxxxxxxxxxxxxxxx x x x x

VI-14 xxxxxxxxxxxx xxx x xxx xxx

VI-15 xxxxxxxxxxxxxxxxxxx x x x x

VI-16 xxxxxxxxxxxxxxxxxx xx x x xx

VI-17 xxxx xx x x xx

xxxxx xxxxx xxxxx xxxxx xxxxxx