China's Fertilizer Industry Presents Three Highlights in 2011

Recently, the industry has summarized three highlights of the fertilizer industry this year: namely, listing, nitro, and integration.

The biggest highlight is the successful listing of many fertilizer companies. On January 18, Chengdu Xindu Chemical Industry Co., Ltd. and Anhui Province Special Fertilizer Co., Ltd. were also listed on the SME Board of the Shenzhen Stock Exchange. On March 2, Anhui Huilong Agricultural Group Co., Ltd. was listed on the Shenzhen Stock Exchange. On June 10, Stanley Fertilizer Co., Ltd. was also listed on the Shenzhen Stock Exchange. As of the end of last year, there were only 24 listed chemical fertilizer companies, of which only two were pure fertilizer companies. This year, four fertilizer production or distribution companies were successfully listed.

From the product point of view, this year's hottest fertilizer industry is a nitro fertilizer. Since the first phase of the 500,000 tons of nitro-nitrogen compound fertilizer produced by Hebei Jingheng Group at the end of December last year, an industry upsurge of nitro-fertilizer investment has started. In January of this year, Xindu Chemical stated that it will invest 1.3 billion yuan to build an annual production of 600,000 tons of nitro compound fertilizer project in Yingcheng, Hubei. In March, Jin Zhengda announced that it invested 3.66 billion yuan in Heze to build a 1.2 million tons nitro compound fertilizer project; in August, Jin Zhengda announced the construction of a phosphorus resource industrial park in Guizhou, in which nitro-fertilizer was an important part. In addition, the nitro-nitrogen projects of Guizhou Kaifeng Group, Shanxi Fengxi Fertilizer Group, Shanxi Tianji Coal Chemical Group, Sichuan Golden Elephant Chemical Industry Group, Yuntianhua International Yunfeng Branch Company and Chuanhua Chemical Co., Ltd. entered the construction phase.

Judging from the characteristics of industry development, this year the industry staged a series of mergers, reorganizations, or expansions. On March 30th, Xindu Chemical announced the “announcement on the use of over-raised capital to increase the capital and expand the stocks to acquire Hubei New Chuzhong Fertilizer Co., Ltd.”. On August 23 and 24, Kim Jong-ta and Stanley issued announcements one after another. The former decided to invest nearly 6 billion yuan in the next five years to build a recycling industry park for phosphorus resources in Guizhou, and to directly enter the upper reaches; the latter plans to invest in building a new type of 1 million tons in Henan. Fertilizer companies develop compound fertilizers and other new types of fertilizers. On October 14th, Kim Jong-tak issued an announcement saying that he has acquired a share of equity of Yunnan Zhongzheng Chemical Industry Co., Ltd. On December 2, Anhui Liuguo Chemical Industry Co., Ltd. issued an announcement stating that the company was bidding for a 51% stake in Jiangxi Guixi Fertilizer Co., Ltd., which was sold at a price of 47 million yuan. From the perspective of integration, it has become an important choice for fertilizer companies to approach resources to overcome bottlenecks in raw material supply and to overcome restrictions on transportation radii near consumption.