Xinfu to Sell Hydrocyanic Acid Business    

Zhejiang Hangzhou Xinfu Pharmaceutical Co Ltd (Xinfu, SZ: 002019) announced on May 5th to spin off its hydrocyanic acid plant in Zibo, Shandong province at a contract value of RMB1.5 million to Zibo Biyun Chemical Co Ltd.
   Xinfu uses hydrocyanic acid to make D-pantolactone that is a key intermediate for the pantothenic acid family products. Zibo Biyun Chemical Co Ltd promised Xinfu that it will not use this plant to produce D-pantolactone in ten years after transaction.
   In 2005 Xinfu bought this plant at a price of RMB6.5 million. Because the plant can not supply sufficient hydrocyanic acid to meet Xinfu's need, it was closed in 2007 and rented to another company.
   This transaction will bring to Xinfu with a loss of RMB6.97 million and a competition risk from Zibo Biyun.  
   Reportedly, Xinfu is now the global leading producer of D-calcium pantothenate and dexpanthenol. By controlling the know-how technology, Xinfu can control the prices of these two products.