Zhejiang NHU and Sinopec ZRCC to build USD0.47 billion methionine project

    Summary: On 26 Dec., Zhejiang NHU announced an intention to build a methionine production project with Sinopec ZRCC, with an investment of up to USD0.47 billion (RMB 3 billion).   

    On 26 Dec., Zhejiang NHU Co., Ltd. (Zhejiang NHU) announced a proposal to sign a letter of intent for JV cooperation with Sinopec Zhenhai Refining & Chemical Company (Sinopec ZRCC), an investment project to build a methionine production facility with a total investment of approximately USD0.47 billion (RMB 3 billion).   

    This is not Zhejiang NHU's first expansion in the methionine production capacity, but a new layout for Sinopec ZRCC. Their alliance will help optimise the industrial structure of the methionine field and increase its localisation rate.   

    The new methionine production project will settle in Zhenhai District, Ningbo City, Zhejiang Province. The two parties will establish a JV as the project's implementation subject to produce and sell methionine products. The registered capital of the JV, 30% of the project's total investment, will be funded in cash, with the shareholding ratio to be tentatively set at 50%:50%.   

    Zhejiang NHU introduced the cooperation with Sinopec ZRCC to set up a JV is aimed at exploring their exchange in resources and technology, and the steady progress of this investment project will push them into deeper collaboration in the premium fine chemicals sector.   

    On the interactive platform, Zhejiang NHU attributed its development in methionine to 2 reasons as follows:   

    
•       Alleviate the shortage of methionine in China     
    
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•       Improve the company's product structure, conducive to making it bigger and stronger and a crucial driver to accelerate local economic development and increase tax revenue and employment opportunities     
  

    This 2^nd methionine production project is expected to push Zhejiang NHU into the 1st tier of the global methionine industry. Currently, Zhejiang NHU has 150,000 t/a solid methionine capacity in Shandong Province and is progressing a new 150,000 t/a project (phase II of the 250,000 t/a methionine project), predicted to be tested and operated in H1 2023. The company has not yet specified the capacity of the project; but based on the total investment of its 250,000 t/a methionine project, USD0.84 billion (RMB5.37 billion), the capacity of the new one is estimated to be around 100,000 t/a-150,000 t/a. Upon operation of the new project, Zhejiang NHU will have 400,000-500,000 t/a of methionine capacity (including the capacity of its JV), only second to Evonik Industries AG and Bluestar Adisseo Co., Ltd. (Adisseo).      

    Cooperating with Sinopec ZRCC, Zhejiang NHU will secure integrated raw materials. The project located at the Ningbo Zhenhai Petrochemical Base will enable an integrated procurement at hand of propylene, methanol, natural gas, and other raw materials and energy sources, bringing cost advantages of methionine. In virtue of the integrative development plan of Sinopec ZRCC's refining and chemical industry, the project is expected to progress more smoothly in the examination & approval and other processes. Since methionine production requires extremely demanding environmental protection and safety conditions, the new methionine production project will better raise the risk resistance capacity of Zhejiang NHU for producing and selling this product.   

    On 2 Dec., the liquid methionine production of Adisseo (600299.SH) in China reached 1 million tonnes, with Bluestar Adisseo Nanjing Co., Ltd. in operation since 2013. The group said on 17 Dec. at the investor interactive platform that phase II of its 180,000 t/a Nanjing liquid methionine plant project progressed well – civil works and 80%+ of construction works were completed – and already went into the pre-commissioning stage. Despite challenges posed by the COVID-19 pandemic and the supply chain, Adisseo remained confident that the phase II project would be completed on schedule (H2 2022) and budget.