How has this high-tech enterprise in Fuling managed to capture half of the market for electronic-grade “laughing gas”?

On October 27, Fuling Tonghui Kefa Company released its third-quarter results: In the first three quarters, the company achieved operating revenue of 145 million yuan, an increase of 76.68% year-on-year. The company expects its full-year revenue to exceed 200 million yuan.

　　On October 27, Fuling Tonghui Kefa Company released its third-quarter results: In the first three quarters, the company achieved operating revenue of 145 million yuan, an increase of 76.68% year-on-year. The company expects its full-year revenue to exceed 200 million yuan.

 

 

▲ The technological upgrade project of Fuling Tonghui Kefa Company has significantly boosted production efficiency. Photo by reporter Zuo Liyun.

　　Tonghui Kefa Company, located in the Fuling Baitao New Materials Science and Technology City, is a specialized, sophisticated, and innovative enterprise primarily engaged in the research and development and production of specialty gases. In just two short years, the company’s revenue has quadrupled twice over. Particularly since this year, despite adverse factors such as rising raw material costs and declining profits, its independently developed electronic-grade nitrous oxide has maintained a market share of approximately 50% in China, giving it strong bargaining power and dominant influence.

　　 “Upgrading” from ordinary industrial-grade gases to electronic specialty gases

　　As you enter the production area of Tonghui Kefa Company, you’ll hear the roar of machinery and see a dense network of massive pipelines connecting one silver-colored tower tank after another. More than 300 meters away, the adipic acid tail gas produced by Chongqing Huafeng Chemical is transported here via pipeline, where it undergoes repeated distillation and purification to ultimately yield high-purity nitrous oxide gas—commonly known as “laughing gas.”

　　“Among our domestic peers, we are the first company specializing in specialty gases capable of purifying nitrous oxide to a purity level exceeding 99.9999%. In some impurity indicators, our performance even surpasses that of established foreign gas suppliers such as Linde and Showa Denko,” said Cui Xiulong, Deputy General Manager of Tonghui Kefa Company. Currently, the electronic-grade nitrous oxide produced by the company is primarily used in industries including semiconductor integrated circuits, liquid crystal displays, solar energy, and optoelectronics. Among its downstream partners are major chip manufacturers like SMIC.

　　As early as 2017, Tonghui Kefa Company put into operation a Phase I nitrous oxide project with an annual capacity of 10,000 tons. Using a simple purification unit, the company could only produce ordinary industrial-grade gas, yielding relatively low profits. Around 2019, as China's semiconductor industry began to flourish, Tonghui Kefa identified the huge market for upstream raw materials and started to position itself in the specialty electronic gases sector.

　　Generally, electronic specialty gases are required to have a purity of 4.5N or higher (where N refers to the number of nines in the purity percentage). Each increase by one order of magnitude represents an enormous challenge for the manufacturing process.

　　“Purity is the most important indicator for testing electronic specialty gases,” said Cui Xiulong. To ensure independent control over critical links, they established an in-house R&D team based on research achievements from the Chinese Academy of Sciences. Building on the purification of adipic acid tail gas, they have re-engineered the core processes—including distillation, purification, and separation—to enhance efficiency and reliability.

　　Each experiment is like undergoing an “extreme” test. By continuously adjusting the temperature and pressure within the apparatus, technicians must identify the maximum critical point at which impurities begin to precipitate during the reaction process, gradually “unlocking” the high-purity level of nitrous oxide.

　　After more than two years of continuous R&D efforts, in 2021, the first batch of electronic-grade nitrous oxide rolled off the production line, making us the first domestic specialty manufacturer to achieve domestic substitution of electronic-grade nitrous oxide. Tonghui Kefa Company now boasts an annual production capacity exceeding 20,000 tons.

　　 Self-developed constant-temperature logistics tank trucks significantly reduce transportation costs.

　　At the loading and unloading area of Tonghui Kefa Company, tank trucks are neatly loaded and ready to depart, preparing to transport the highly purified nitrous oxide that has been filled into them to Yancheng, Jiangsu Province. While ordinary Y-shaped cylinders are typically used to transport nitrous oxide, a single truck can carry at most 270 kilograms. In contrast, the specialized tank trucks independently developed by Tonghui Kefa Company can transport up to 20 tons of special gases in a single trip.

　　“The secret lies in the self-regulating thermostat built into the tank car,” explained Cui Xiulong. Liquid nitrous oxide has a volume much smaller than its gaseous form, and conventional transport vehicles lack temperature-control devices, forcing them to carry it in a gas-liquid mixture. However, the self-regulating heating chamber they’ve developed can maintain a low temperature during transport, enabling nitrous oxide to be transported in liquid form. By maximizing space savings, this approach significantly reduces the transportation costs of these specialty electronic gases.

　　Since the beginning of this year, Tonghui Kefa Company has consecutively signed agreements with a number of downstream partners, including LONGi Green Energy and Tongwei Co., Ltd. “Compared with other domestic and international specialty gas manufacturers of similar types, Tonghui enjoys a significant price advantage, which is highly attractive to us,” said the head of the procurement department at LONGi Green Energy. The company’s photovoltaic power stations are located in numerous provinces and cities across China, including Jiangsu, Qingdao, and Henan. Logistics is a key factor they take into consideration, and through technological innovation, Tonghui Kefa Company has managed to substantially reduce transportation costs.

　　Over the past three years, Tonghui Kefa Company has accumulated R&D investments exceeding 16 million yuan, accounting for more than 5.5% of its total sales revenue. “Spending more effort on tackling key technological challenges is a major reason why we’ve been able to withstand market pressures and move forward steadily,” said Cui Xiulong. Moving forward, the company will further increase its investment in intelligent and digital technologies, accelerate projects such as replacing human labor with machines and implementing smart upgrades, and thereby drive down energy consumption, improve efficiency, and expand its market reach.

　　For example, in the fourth quarter of this year, Tonghui Kefa Company plans to introduce CNC equipment and upgrade its distillation process. Relying on big data collection and analysis, workers will be able to monitor energy consumption and equipment operation status of the production line in real time from large screens at their workstations. Once anomalies such as pressure drops or leaks occur, the system will immediately trigger an alarm, alerting technicians to promptly go to the site for repairs.

　　“After the implementation of the technological upgrade project, the utilization rate of ‘laughing gas’ raw materials will be effectively improved. We estimate that this will help the company cut energy consumption costs by over 3 million yuan for the year and boost production efficiency by 10%,” Cui Xiulong told reporters. Driven by intelligent and digital technologies, they are making steady strides toward smart manufacturing and aim to exceed 200 million yuan in annual operating revenue this year.

　　 Fuling aims to add more than 30 high-tech enterprises this year.

　　Tonghui Kefa Company is just one example of how Fuling District is leveraging science and technology innovation to upgrade its industrial structure and encourage small and medium-sized enterprises to become the main driving force behind innovation. “By focusing on ‘newness,’ many companies have diligently honed their ‘unique expertise,’ securing an irreplaceable position in niche markets and critical links within the industrial chain, thereby playing a vital role in enhancing the stability and competitiveness of the region’s industrial and supply chains and in building a new development paradigm,” said a relevant official from Fuling District.

　　Currently, Fuling District has cumulatively fostered 150 specialized, sophisticated, and new (SSN) small and medium-sized enterprises at or above the municipal level, including 8 national-level “Little Giant” enterprises, primarily located in fields such as fine chemicals, new materials, and equipment manufacturing. Since the beginning of this year, these specialized, sophisticated, and new “Little Giant” enterprises have shown a rapid growth trend. In the first three quarters, the district’s SSN enterprises achieved cumulative operating revenues of 87.95 billion yuan, with R&D expenditures totaling 1.88 billion yuan—accounting for 2.14% of operating revenues and representing a year-on-year increase of 9.4%.

　　Next, Fuling District will continue to focus on fostering and supporting the high-quality development of science and technology innovation-driven enterprises, and promote small and medium-sized enterprises to become the main force in innovation. By the end of this year, the district aims to add more than 30 new high-tech enterprises and over 100 technology-based enterprises.

　　Focusing on the cultivation of specialized, sophisticated, and innovative enterprises, Fuling District will continue to strengthen its role in building industrial ecosystems and reinforcing supply chains. It will fully leverage the chain-strengthening and chain-supplementing roles of these specialized, sophisticated, and innovative enterprises. Centered around industrial sectors such as green and low-carbon development, life and health, and smart technology, the district will comprehensively map out the upstream and downstream collaborative relationships among leading enterprises in each chain. Specifically, it will establish a dedicated database for cultivating specialized, sophisticated, and innovative enterprises and implement targeted support measures to attract resources—including technology, capital, talent, and data—toward these enterprises.

　　To stimulate innovation vitality in the “industry-academia-research” collaboration, Fuling District will also develop a number of high-level science and technology innovation platforms, accelerate the construction of Huigu Lake Science and Technology Town, and attract well-known domestic and international research institutes and leading enterprises to establish new, high-end R&D institutions in Fuling. Additionally, the district will foster a group of industrial innovation centers, technology innovation centers, and engineering research centers, striving to create five or more R&D institutions at or above the municipal level throughout the year.

　　“We are working hard to establish an innovative development model characterized by leading enterprises taking the lead and driving growth, while fostering integrated collaboration among large, medium, and small enterprises,” said a relevant official from Fuling District. As their next step, they will simultaneously intensify efforts in promoting scientific and technological innovation and the commercialization of scientific and technological achievements. They will continue to implement mechanisms such as “posting challenges and appointing leaders” and “race-to-the-top competitions,” accelerating the local trading, transformation, and application of scientific and technological results. They will also align innovation chains and talent chains with industrial chains, adopting a determined and decisive attitude to sprint through the fourth quarter and deliver a strong finish.