Nantong, China


Reilly Industries is the world's largest producer of pyridine. In 1998, Reilly awarded a plant construction contract to Foster Wheeler of the USA, to build a speciality chemical manufacturing plant in Nantong, Jiangsu province, China.

The $30 million plant is designed to produce 11,000 tonnes per year of pyridine products, which is broken down into 8,000 tonnes per year of pure pyridine and 3,000 tonnes per year of methyl pyridine. Of the 8,000 tonnes of pure pyridine, 5,000 tonnes will be sold to a British funded pesticide factory based in Nantong, while the remaining 3,000 tonnes are for the Asian and Chinese markets.

Reilly Industries is a leading producer of speciality chemicals focussing on pyridine derivatives. The company has a total employment of approximately 900 and is also active in the production of coal tar products, potash and citric acid esters. The company states that it supplies 70% of the global demand for pyridine products. The new plant project is a joint venture in which 33% is held by Nantong Acetic Acid Chemical factory and 67% by Reilly Industries. This is the latest of Reilly's pyridine deals: the company purchased 32% of Armour Polymers in 1997 whilst a more recent venture was the acquisition of Allied Signal's coal chemicals business, which includes plants in Longview, WA.

Currently only one factory in China produces industrial pyridine but it is on a small scale and is far from reaching the levels needed to meet the demand of the industry. Assessments of domestic production rates of pyridine imply that China is becoming dependent on imports, because its own production is inadequate to meet its needs. Annual demand since 1990 has grown from 1,000 plus to an estimated 5,000 tonnes/year by 2010 as pyridine has become used increasingly as a base material in the production of medicines, pesticides, feeds, and other chemical products.

The growth in China's population is also putting pressure on supplies as farmers turn to pyridine based pesticides to increase yields and lower costs. Up till now development of the industry has been slow due to heavy reliance on imports with 45% of annual consumption being imported from Belgium, Japan, the US and India.

CHEMICAL MANUFACTURING PLANT PROJECT

The project is a joint venture between Reilly Industries and Nantong Acetic Acid Chemical Factory. Reilly industries awarded American based Foster Wheeler the contract to construct the $30 million manufacturing plant by the second half of 2001.

The plant will produce 6,000 tonnes of the herbicide Paraquat, an active ingredient in Graxomone. It will also formulate as well as package chemical products including a leading insecticide Pyrethroid. The project will incorporate state of the art technology and will operate to international health, safety, and environmental standards.

The new plant will supply 50% of it pure pyridine directly to Zeneca (UK) by means of a pipeline which is directly linked to Zeneca's factory (adjacent to the new plant). This will be used in the production of Paraquat. The remainder of the plant's production output, including that of methyl pyridine, will be sold to Asian and Chinese markets.

Further joint ventures are anticipated with German based Degussa in the production of b-picoline (a byproduct of animal feed), and with US and European based companies to produce nicotinamide. This will then lead to production being moved to China for all of the product range.