China further opens fertilizer wholesale sector
By Xiao Wan (China Daily)Updated: 2006-12-07 09:00
Yang said many small companies have great potential to grow. "We are eyeing
players with a production capacity of at least 50,000 tons."
The company
has seen its shares jump by over a quarter in Hong Kong trading after a US$341
million offering in September.
"China's fertilizer industry is facing
great opportunities," said Li. "With the opening of the fertilizer market, more
and more foreign giants will begin to eye the sector."
In February the
world's biggest fertilizer enterprise, Canada-based Potash Corp of Saskatchewan
Inc, completed a 10.01 per cent purchase of Sinofert for US$126
million.
The acquisition boosted Potash Corp's holding in Sinofert to 20
per cent. Potash Corp purchased 9.99 per cent stake in the company last
year.
"This is a significant investment that will have an immediate
positive impact on our company and, more importantly, will provide significant
growth potential for us over the long term," said Bill Doyle, Potash Corp
president, when commenting on the deal.
Potash Corp is the world's
largest fertilizer firm by capacity, producing the three primary plant
nutrients-potash, phosphate and nitrogen. It is the world's largest potash
company, with 23 per cent of the world's overall capacity and 86 per cent of
unused global capacity.
China has become the world's largest producer
and consumer of fertilizer, according to official statistics. It produces about
one third of the world's fertilizer every year and consumes about 35 per
cent.
China is also a big importer and exporter of fertilizers.
Statistics show that in the January-September period of this year, the country
imported 7.71 million tons of fertilizer and exported 3.44 million
tons.
Since China entered the World Trade Organization five years ago,
the nation has cancelled fertilizer import quotas and has altered tariff quotas
to fulfil its commitments.
Currently, the nation's fertilizer price is
still controlled by the government, which is much lower than the price on the
global market.
China will gradually improve its pricing mechanism of
fertilizer, said industry insiders.
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