Summary: It was announced on 21 April that Zhejiang NHU would allocate some of the funds to increase NHU Amino Acid's capital, in a bid to ensure smooth implementation of 250,000 t/a methionine project. The construction of said project is expected to be completed in June 2023. The construction commencement mobilisation meeting for 180,000 t/a liquid methionine hydroxy analogue (MHA-FA) project, a project resulting from cooperation between Zhejiang NHU and Sinopec Corp., was held on 28 April.

On 21 April, Zhejiang NHU Co., Ltd. (Zhejiang NHU) revealed that the company would allocate some of the funds to increase capital of Shandong NHU Amino Acid Co., Ltd. (NHU Amino Acid)—its wholly-owned subsidiary, in a bid to ensure smooth implementation of 250,000 t/a methionine project.

The revealed information indicated that the amount of capital increase totalled USD126.82 million (RMB900.00 million), of which USD9.86 million (RMB70.00 million) would be used to increase registered capital and USD116.96 million (RMB830.00 million) would be put into capital reserve.

On 26 April, the registered capital of NHU Amino Acid was changed from RMB1.03 billion to RMB1.10 billion.

Overview of Phase II of 250,000 t/a methionine project

• Type of project: Reconstruction and expansion
• Construction site location: Factory Compound of NHU Amino Acid, Advanced Manufacturing Industrial Park, Binhai Economic and Technological Development Zone, Weifang City, Shandong Province
• Investment: Investment in Phase II totals USD551.38 million (RMB3.91 billion), 10.1% of which, USD55.56 million (RMB394.30 million), are for environmental protection purposes.
• Budgeted posts and working schedule: There will be 196 budgeted posts for Phase II. There will be three 8-hour shifts per working day and 330 working days per year. Annual running time of production plant(s) amounts to 7,920 hours.
• Construction item: A production line for 150,000 t/a solid methionine

Construction progress of 250,000 t/a methionine project

• Zhejiang NHU's annual report of 2022 results disclosed that as of 31 Dec., 2022, Phase I (100,000 t/a methionine plant) was running swimmingly; construction of Phase II (150,000 t/a methionine plant) was being advanced as planned and was expected to completed in June 2023; progress of Phase II construction reached 80%.

Among all essential amino acids, methionine is the only sulphur-containing amino acid. The animals can not generate methionine and needs to acquire it from external sources. Therefore, methionine has been extensively applied in pharmaceutical health care products, foods and feed. Zhejiang NHU's annual report of 2022 results disclosed that the development of methionine industry in China had been accelerating in recent years, with capacity and supply continuously favouring the domestic market; the growth of global methionine capacity was principally contributed by Chinese producers, mainly because some European producers cut production periodically due to energy problems; China's output of methionine in 2022 totalled 443,000 tonnes and went up by 21.40% YoY, which accounted for 26.70% of the total methionine output in the world.

On 28 April, the construction commencement mobilisation meeting for 180,000 t/a liquid methionine hydroxy analogue (MHA-FA) project and the plaque-unveiling ceremony for Ningbo Zhenhai Refining & Chemical NHU Biotechnology Co., Ltd., a 50:50 joint venture (JV) between Zhejiang NHU and China Petroleum & Chemical Corporation (Sinopec Corp.), was staged at methionine project site on the 2# land in Zhenhai Base of Sinopec Corp. Investment in the 180,000 t/a liquid MHA-FA project totals USD365.60 million (RMB2.59 billion).

Zhejiang NHU started to make arrangements for 180,000 t/a liquid MHA-FA project in 2021. On 30 Dec., 2022, Zhejiang NHU and Sinopec Corp. signed the Shareholders' Agreement so as to establish a JV as the project's undertaker that builds the 180,000 t/a (based on 100% active ingredient) liquid MHA-FA production plant. The cooperation was originally reached with Sinopec Zhenhai Refining & Chemical Co., Ltd.; but the cooperator was subsequently changed into Sinopec Corp. On 9 March, 2023, as the industrial and commercial registration procedures were completed and the business licence was issued, said JV (Ningbo Zhenhai Refining & Chemical NHU Biotechnology Co., Ltd.) was formally established with a registered capital of RMB778.36 million, to which each party contributed 50%. The JV mainly engages in production and sale of methionine products.

Additionally, as of 31 Dec., 2022, Zhejiang NHU's 30,000 t/a taurine project, which obtained environmental protection administrative approval in Jan. 2022, started equipment commissioning, according to its annual report of 2022 results.