【2025 Industry Trends】New Moves by Wanhua Chemical

Jinhé Industry is primarily engaged in the research, development, production, and sales of fine chemical products such as food additives and pharmaceutical intermediates. The company’s products include sweeteners such as acesulfame and sucralose, as well as flavoring agents such as maltol and ethyl maltol. The company’s headquarters is located in Chuzhou City, Anhui Province.

In recent years, Wanhua Chemical has been making a strong entry into the flavors and nutrients market by leveraging its signature approach of \"technological breakthroughs + integrated supply chain.\"

In August 2024, Wanhua Chemical announced that its 48,000-ton-per-year citral production facility had completed a successful trial run, producing qualified products. This not only marks the official commissioning of the world’s largest citral production facility, but also signifies that Wanhua has completed its strategic layout in the fields of flavors, fragrances, and nutritional chemicals. Citral is regarded as the \"gemstone on the crown\" among fine chemicals, with a complex production process and extremely high technical challenges. As a key intermediate in the production of flavors and nutrients, citral is an essential core flavoring in the flavor ingredients market, and it is widely used in various industries such as food, cosmetics, and pharmaceuticals.

More importantly, citral is a key raw material for the production of vitamin A and vitamin E. In the global market, this sector has for a long time been dominated by the German chemical giant BASF, which holds nearly 80% of the market share. Wanhua’s entry will completely change this landscape. According to analysis, Wanhua Chemical’s breakthroughs are evident in three aspects. Scale advantage: With a production capacity of 48,000 tons per year, it far exceeds Shin-Nakano’s 8,000 tons per year and Kolon’s 5,000 tons per year, making it the facility with the largest single-unit capacity in the world.

Technical independence: Both Wanhua Chemical and BASF use the isobutylene-formaldehyde process, but Wanhua Chemical has achieved technological breakthroughs through independent research and development； Another manufacturer in this industry, Xinhecheng, uses the dehydrolinalool method.

Industrial chain synergy: The citral plant is integratedly constructed with downstream derivative plants for geraniol, citronellol, etc., thus forming a complete industrial chain.

Of particular note is that the commissioning of Wanhua’s citral production line coincided with a critical period when BASF’s German plant was shut down due to an accident. In July 2024, a fire broke out at the BASF plant in Ludwigshafen, causing damage to the facilities used for producing vitamin A, vitamin E, and various fragrance ingredients; production is not expected to resume before January 2025. This sudden event led to a sharp rise in global vitamin prices, with the price of VA increasing by 174% at one point. Wanhua’s timely commissioning not only alleviated the tight supply situation in the market but also demonstrated the crucial role of Chinese companies in the global supply chain.

Wanhua Chemical’s entry into the fragrance industry was not a spur-of-the-moment decision, but rather the result of 13 years of careful planning. According to available records: In 2011, Wanhua Chemical began pilot studies on citral products ； 2018: Wanhua Chemical publicly released the environmental impact assessment for its synthetic fragrance project for the second time ； 2021: Wanhua’s integrated project for citral and its derivatives was officially announced to the public ； August 2023: Wanhua Chemical established Wanhua Nutrition Technology Co., Ltd., focusing on flavors, nutritional products, and high-end intermediates ； August 2024: The world’s largest citral production facility came online, and a framework agreement for cooperation in the fragrance sector was signed with Jinhé Industrial ； This series of actions indicates that Wanhua Chemical’s approach in the fragrance sector is a systematic and long-term strategic decision, rather than short-term speculative behavior.

Wanhua’s presence in the fragrance industry extends far beyond just the citral product. According to public information, its spice business portfolio also includes the \"high-efficiency green asymmetric catalytic method for producing L-menthol\", developed in collaboration with Shanghai Jiao Tong University; an industrial facility with a capacity of 1,000 tons per year was established, making the company the fourth in the world to master this technology ； Furthermore, in June 2021, the Meishan Ecology and Environment Bureau approved the environmental impact assessment for Wanhua’s Meishan facility, which includes projects for the production of linalool (18,000 tons per year) and vitamin E (20,000 tons per year) as fine chemicals. In May 2022, Wanhua Penglai released an environmental impact assessment showing plans to build a project for the production of 0.42 tons of β-vanillin plus vitamin A.

Thus, Wanhua has completed its overall business framework for citral and its derivatives, covering the fragrance industry (such as citronellol, eugenol, violet aldehyde, linalool, menthol, and the cooling agent WS3) as well as the nutrition chemicals sector (vitamin A and vitamin E). This strategy of having a complete industrial chain is precisely the key factor behind Wanhua’s success in the MDI sector. Today, this model has been replicated in the spice industry, with the potential to create a \"spice version of Wanhua\".