Communications Office
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As mentioned in previous chapter, yellow phosphorus has always been a key raw material for the groups’ products. “Phosphorus sourcing has always been a crucial factor in our supply chain”, points out Marco Morone, Group Logistics and Supply Chain Manager at Italmatch, who had always supported the CEO lorio on phosphorus purchasing strategies. China has always been a key partner in this scenario. Confirming how much the group has historically looked to the East, today Italmatch owns three factories on Chinese soil.
The first is the historical one of Rugao, the city-county not far from Shanghai, located in the province of Jiangsu and administered by Nantong prefecture. This is the first 100% Chinese plant, arriving after the first two joint ventures for the supply of yellow and red phosphorus. Initially, production had many similarities with those of the Spoleto plant, as it focused on halogen-free products and melaminbased flame retardants. Subsequently, however, Italmatch Group invested to create here a production of red phosphorus masterbatches and one of hypophosphite (hypophosphorus acid salt crystals), both with proprietary technologies.
The second plant is located in Changzhou, also in Jiangsu province, but on the Southern bank of the Yangtze River. It is a very large plant, which occupies an area of over 90,000 square meters, with approximately 90 people employed.
It hosts two production lines, with a total capacity of 60,000 tons per year. As already mentioned in chapter 5, the plant became part of the group following an important operation completed in 2018, when Ecolab Group sold to Italmatch the business and asset of the plant related to the Water Business production and sale of phosphonate-based additives. It was a transaction that allowed Italmatch Chemicals to strengthen its international position also in this specific segment, which already included dedicated factories in the USA and Europe.
The satisfaction for this operation is well underlined by the statement accompanying the official 2018 announcement, signed by CEO Sergio Iorio.
In fact, today China represents a rapidly growing market, particularly in the water treatment sector, characterized by high quality and high environmental standards, in line with the Central Government’s objectives aimed at improving levels of environmental protection guaranteed by chemical companies, fully aligned with Italmatch Chemicals’ strategic objectives in the Asia-Pacific region.
Furthermore, the expansion of the production footprint acquired through this operation strengthens Italmatch ability to satisfy its largest customers in the world"
Italy-China relations: Italmatch Awarded
Already in 2007, Italmatch Group was among the winners of the Top Investors in China Award, organized by Fondazione Italia-Cina. Another milestone was reached in 2015, when the Italian Chamber of Commerce in China awarded Italmatch the Golden Panda award, recognizing the Italian company as the “Best Italian medium-small Enterprise in China” and including it among those Italian companies that had stood out for their productivity and competitiveness within the Chinese borders. It was on that occasion that the General Manager, Maurizio Turci, summed up the group’s feeling towards the country.
The achievement of the Golden Panda award is today confirmation of our ability to believe and invest in a great project and marks the beginning of a new journey towards our most important objective: to continue to grow and to take the excellence of Italian chemistry to a global level".
Fangcheng and the lubricants
Finally, Italmatch built the Fangcheng factory, located in Fangchenggang, in Guangxi autonomous prefecture, in the south of the country, not far from the border with Vietnam. In this case also, as for Nantong, it is a greenfield plant built by Italmatch and today occupies an area of over 66,000 square meters, where more than 60 people work. The production capacity exceeds 15,000 tons per year and is mainly concentrated on phosphorus pentasulfide (P2S5) performance products, a compound based on phosphorus and sulfur predominatly used as an additive in lubricating oils, but which also finds application in the production of insecticides and pesticides, as well as in the mining industry.
The project area lies within the Phosphorus-Chemical Industry Park of Fangchenggang (Guangxi province, China) planned by the Chinese authorities to concentrate companies that work with phosphorus.
The peculiar difficulties of the project became evident immediately, since the area was crossed by a river approximately 20 meters wide, which the Chinese authorities appropriately covered and diverted.
The mechanical completion of the plant took place in March 2019. During the development of the project, the necessary training and simulations were organized in shifts, with Chinese colleagues coming to Spoleto to learn the art of producing phosphorus pentasulphide from those who had been working in the Italian plant for many decades and, vice versa, supporting Italian colleagues in China during start-up and post-start-up.
In January 2020, at the outbreak of the Covid pandemic, the world stopped. In March of that year we planned the last coaching session with our Chinese colleagues, but it was not possible to hold the training. In September, having taken the appropriate precautions, we had planned that ten Italmatch colleagues should leave for the last coaching session, but we were worried about being stuck abroad: in the end, only five of us left.
We were subjected to a strict quarantine in China and also upon returning to Italy. Despite the difficulties, all of which have been resolved, the plant today is able to offer a superlative quality of distilled pentasulphide".
A project is currently underway for a new retardant production line that will be able to produce a range of halogen-free products. “The expansion started in mid-2022 and was completed in July 2023, with trials completed in September. Today, the new plant is capable of producing 2,000 tonnes per year” comments David Ma, General Manager of Fangcheng.
The new investment is also in line with the overall strategy to meet the growing demand for environmentally friendly flame retardants, particularly for the electrical and electronics industry, including electric mobility and photovoltaic panels for renewable energy. This new production is an example of the diversification strategy that is not only geographical, but aims to make the individual plants as independent as possible from raw materials, guaranteeing a certain degree of flexibility.
Continue to read and find out more about the successful relationship between Italmatch and Private Equity.
