Production, Market and Benchmarking of Trimethyl Hydroquinone in China

Production, Market and Benchmarking of Trimethyl Hydroquinone in China

Chapter One: Production & Market Information

The Chinese ability to improve their competitiveness (technology, production, export, etc.) has been proved in the past years and has been recognized in the world market. Chinese manufacturers have grown from initially smaller factories to the ones with mass scale production. The impact of Chinese production on the global market will be undoubtedly direct, obvious, and unavoidable.

In the near future, the Chinese production of both vitamin E and TMHQ is bottlenecked by the sufficient and cheap supply of TMP and meta cresol.

However, Chinese manufacturers are no longer satisfied to supply the vitamin E series, they also start to back integrate the product chain by doing research work and commercial production on TMP. It is possible that the Chinese manufacturers will make breakthrough to the product chain from meta cresol to TMP, till TMHQ.

With the completion of back integration of vitamin precursors in China, the vitamin E manufacturers can further lower the production cost and hence improve its competitiveness in the world market.

Chapter Two. Benchmarking of TMHQ Production in China
Trimethylhydroquinone (TMHQ) is one of the starting materials for the tocopherol synthesis.
In China, there are several kinds of method to produce TMHQ. The most common ones include:
- Starting from TMP
- Starting from meta cresol.

The process that starts from meta cresol is a more competitive one. So in the present study we focus on this process.

The aim of our work is to investigate the production process of TMHQ in detail and the current production situation of the Chinese manufacturers in an effort to understand the production costs and price in China and to analyze the strength and weakness of the Chinese manufacturers.

Briefly, we conducted our work in several phases:
- Preparative Work
- Discussion with Manufacturers & Information Verification
- Production Cost Estimation
- Benchmarking Update



Zhejiang Medicine Co., Ltd. Xinchang Pharmaceutical Factory, Zhejiang NHU Co., Ltd., Zhejiang Huangyan Biochemicals Industry Co., Ltd.,Chengdu Liuling Chemical Factory, Shanxi Ruicheng First Chemical Co., Ltd., etc.

TABLE OF CONTENT
Executive Summary
Methodology & Sources
I Chapter One: Production & Market Information
I-1 An Overview of Vitamin E Production in the Past Years
I-1.1 Foreign Spell
I-1.2 TMHQ
I-1.3 Isophytol
I-1.4 Broke the Spell-Linalool
I-1.5 Industrial Restructuring
- Xinchang Factories (Xinchang Pharma & Xinchang Synthetic)
- Bengbu Kangda
- Southwest Synthetic
I-1.6 Ever-Growing Production
I-1.7 Ever-Declining Pricing
I-1.8 Changing Characteristics of Chinese Supply
I-2 Summary of TMHQ Situation
I-2.1 Production Situation
I-2.2 Import Situation
I-2.3 Mass Balance
I-2.4 Pricing of TMHQ in the Past Few Years
I-3 Brief Introduction to the Situation of Major Raw Material – Meta Cresol
I-4 Outlook of TMHQ in the Future
Conclusion
Recommendation
II Chapter Two. Benchmarking of TMHQ Production in China
II-1 First Stage: Preparation Work
II-1.1 Introduction to This Work
II-1.2 Model for MTsHQ Production
II-1.2.1 Reaction scheme
II-1.2.2 Production Flow Chart
II-1.2.3 Explanation of TMHQ Production
II-1.3 Details of experimental procedure (on lab research)
II-1.4 Theoretical Calculation Based on the above Model
II-1.5 Further Works on Benchmarking
II-2 Second Stage: Verification
II-2.1 Introduction to Second Stage Work
II-2.2 Factory Visits Verification
II-2.3 Estimation of the Raw Material Cost in Major Chinese Manufacturers
II-2.3.1 Update of Raw Material Cost for TMHQ
I-2.4 Estimation on the Production Cost in Xinchang Pharma
II-2.5 Estimation of Profit in Chinese Manufacturers
II-3 Conclusion of Benchmarking
III Chapter Three. Appendix: Situation of Chinese Manufacturers
III-1 Active Manufacturers of TMHQ
III-1.01 Zhejiang Medicine Co., Ltd. Xinchang Pharmaceutical Factory
………
III-1.03 Zhejiang Huangyan Biochemicals Industry Co., Ltd.
III-2 Brief Introduction to Some Non-Active/Ideled TMHQ Manufacturers
III-2.01 Chengdu Liuling Chemical Factory
………..
III-2.06 Zhejiang Xiaoshan Jinchuang Chemical Factory
III-3 Introduction to Active TMP Producer
III-3.01 Shanxi Ruicheng First Chemical Co., Ltd.

LIST OF TABLES
Table I-1-1 Production of synthetic vitamin E oil in the past years
Table I-1.6-1 Number of vitamin E producers in the past
Table I-1.6-2 Active producers of synthetic vitamin E in 2004
Table I-1.7-1 Average export price of E oil from 1998-2003
Table I-2.1-1 Production summary of TMHQ in the past years (Unit: Mts)
Table I-2.2-1 Import of TMHQ in the past years (unit: MTs)
Table I-2.2.2-1 Active importers of TMHQ in 2003
Table I-2.2.2-2 Origin of TMHQ in 2003
Table I-2.2.2-3 Import price of TMHQ in 2003
Table I-2.2.2-4 Consumptions area of imported THMQ in 2003
Table I-2.2.2-5 Delivery port of TMHQ in 2003
Table I-2.4-1 Price for imported TMHQ for VE in 2002 – 2003 (Unit: USD/kg CIF CMP)
Table I-3.1-1 List of meta cresol producers in China
Table I-3.1-2 Summary of production situation of meta cresol in China
Table I-3.2-1 Import & export of M-cresol in the past
Table I-3.2-2 Table Origin of metal cresol in 2001~2003
Table I-4-1 Demand for meta cresol from vitamin E industry
Table II-2.3.1-1 Estimated Raw Materials Cost for the Production of TMHQ
Table II-2.3.1-2 Estimated Raw Materials Cost for the Production of TMHQ
Table II-2.3.1-3 Estimated Raw Materials Cost for the Production of TMHQ – January 2001
Table II-2.3.1-4 Estimated Raw Materials Cost for the Production of TMHQ – August 2002
Table II-2.3.1-5 Estimated Raw Materials Cost for the Production of TMHQ – June 2004
Table II-2.4-1 Manufacturing cost based on the model (June 2004)
Table II-2.5-1 Profit estimation of TMHQ in Xinchang Pharma (by June 2004)

LIST OF FIGURES
Figure I-2.3-1 Mass balance of meta cresol, TMP, THMQ and vitamin E in 2003 (unit: MTs)
Figure I-2.4-1 Pricing of TMHQ in the past years
Scheme Synthesis of trimethylhydroquinone (TMHQ) starting from m-cresol
Flow Chart Synthetic process of 2,3,6-trimethylhydroquinone