china s fertilizer industry and investment analysis …china’s fertilizer industry and investment...

中国大豆及油脂油料报告(月报)

China’s Fertilizer Industry

and Investment Analysis Report —Along with external anti-driving factors and internal development, transformation and upgrading become inevitable

2017/2018

Beijing Orient Agribusiness Consultants Limited

April, 2018

China’s Fertilizer Industry and Investment Analysis Report (2017-2018)

Independ • Objective • Forward Looking of 31

Research Background

Based on 20 years of accumulative industrial data such as a continuous track on industrial

changes and in-depth research, BOABC offers a valuable fertilizer industry and investment

analysis report.

On the one hand, China’s fertilizer industry saw anti-driving factors such as overcapacity, a

plan of zero growth in use of fertilizer, environmental pressure and a drop in industry

profitability; on the other hand, along with diversified demands on fertilizer supply and service

resulting from prominent scaled agriculture and emerging new-type operators, etc.,

transformation and upgrading become inevitable choices for fertilizer industry. So China’s

fertilizer industry is facing both serious problems and new development opportunities.

On the one hand, China’s fertilizer industry is facing serious situations.

(1) Owing to serious oversupply, cutting excessive capacity has been a consensus. Currently,

domestic fertilizer capacity has reached 200 million MT (product). Along with N-fertilizer

overcapacity at 40% and P-fertilizer overcapacity at 60%, as well as compound fertilizer

overcapacity, cutting overcapacity has become a consensus.

(2) Due to fierce competition, profitability dropped. Influenced by overcapacity and a weak

demand from agriculture, profit margins of fertilizer industry was gradually being narrowed,

and the profits dropped. For example: N-fertilizer industry has fallen into loss for three

consecutive years, and the loss reached 10 billion RMB, so some backward capacity is being

eliminated or upgraded.

Along with the pressure from policies, reducing the use of fertilizer has become inevitable.

Along with strengthening environmental regulation, a plan of zero increase in use of fertilizer,

the action of organic fertilizer for fruits, vegetables and leaf tree instead of fertilizer and the

cancellation of preferential policies for powder, natural gas and transportation, especially zero

growth in use of fertilizer in Shandong and Henan has realized initially and would have



achieved nationwide by 2020, reducing the use of fertilizer has become inevitable.

On the other hand, fertilizer industry is facing new development opportunities.

(1) Land is intensively circulated, new-type operating entities are growing stronger and

stronger, and intensive operation is prominent. Currently, the areas of land circulation have

approached to 500 million mu, accounting for 1/3 of the total areas for contract land; along

with increasing intensification of planting, the demands on fertilizer supply, service, etc., are

increasingly diversified.

(2) The structure of fertilizer demand is changing and the consumption is being upgraded.

The consumption of agricultural products is shifting from quantity to quality; along with

changing planting structure, the areas of cash crops are gradually expanding, and the

nutrients for crops are paid more, which provides more opportunities for new-type fertilizer

industry.

This report does deep analysis on developmental trends of 2017 fertilizer industry, dissects

operating, transformation and upgrading modes of key companies, and sums up investment

trends of domestic companies and capital, in order to provide accurate operating trends, the

opportunities of transformation and upgrading and future investment trends to the players

involving in fertilizer industry.



Table of Content

Research Background ............................................................................................. 2

Part One Forecast and Analysis on Fertilizer Market in 2017-2018 ................... 23

1 Analysis on the Development Environment and Policy of Fertilizer Industry in

2017 ......................................................................................................................... 23

1.1 Analysis on the Macro Environment of Agriculture. .................................................... 23

1.1.1 A Drop in Agricultural Product Prices Influenced Fertilizer Market ................................ 23

1.1.2 Planting Structure Adjustment Affected National Fertilizer Consumption ..................... 25

1.1.2.1 Regional Concentration of Crops .......................................................................................... 25

1.1.2.2 A Cut-down in Staple Grain Planting Areas ........................................................................... 25

1.1.2.2 Rice Planting Areas will be Reduced by 10 Million Mu in 2018 ............................................ 26

1.1.3 Changes in Scaled Business Entities Transformed Sales Models of Fertilizer

Companies .............................................................................................................................. 26

1.1.4 Scaled Production and Operation Changed the Modes of Fertilization ........................ 26

1.2 Technical Level and Technology of Industry .............................................................. 27

1.2.1 6 New Standards for New-Type Fertilizers were Officially Implemented ...................... 27

1.2.2 More Indexes in Pollution Discharge Limit of Air Pollutants from Fertilizer Production 27

1.3 Analysis on Industry Policies in 2017 ......................................................................... 28

1.3.1 Fertilizer VAT Rate Decreased to 11% from 13%, and Tax Reduction was 15 Billion

RMB ........................................................................................................................................ 28

1.3.2 The Ministry of Agriculture Required to Build up Credit Files about Producers and

Business Entities of Agricultural Materials and Agricultural Products .................................... 28

1.3.3 Organic Fertilizer Substitution for Fertilizer Leads to An Increase in Planting Costs of

Fruits, Vegetables and Tea Plants, Slowing Their Promotion ................................................ 29

1.3.4 Environmental Taxation Reform Policy Would Improve Operating Costs of Fertilizer

Companies .............................................................................................................................. 29

1.3.5 Environmental Policy was the Main Reason for a Great Increase in Fertilizer Prices in

2017 ........................................................................................................................................ 32

1.3.6 New Tariff Policy Won’t Bring Down the Decreasing Trend of Fertilizer Exports in 201732

1.3.7 Owing to a Reduction in Export Tariffs for NPK, Exports Would Increase Greatly ....... 33

2 Analysis and Forecast on Upsteam Sectors of Fertilizer in 2017-2018 .......... 35

2.1 Coal Market Analysis in 2017..................................................................................... 35



2.1.1 2017 Raw Coal Output Stood at 3.45 Billion MT, up 3.2% from 2016 .......................... 35

2.1.2 Growth in Coal Imports Slowed Up, but There was Still Some Rigid Demand in the

Domestic ................................................................................................................................. 35

2.1.3 Anthracite Prices Dropped Greatly ................................................................................ 36

2.1.4 150 Million MT of Coal Capacity Would be Cut Down in 2018, and the Prices Still Would

Maintain at a High Level ......................................................................................................... 37

2.2 Ammonia Market Analysis in 2017 ............................................................................. 37

2.2.1 2017 Ammonia Output Was 48.833 Million MT, a Record Low ..................................... 37

2.2.2 Ammonia Imports Increased by 75.6% Greatly ............................................................. 38

2.2.3 Average Price of Ammonia Maintained at a High Level, up 10.76% Year on Year ....... 39

2.2.4 2018 Ammonia Output Would Continue to Reduce, and the Prices Still Would Maintain

at a High Level ........................................................................................................................ 40

2.3 Hosphorite Market Analysis in 2017 ........................................................................... 41

2.3.1 Phosphate Rock Output was Up 2.4% Year on Year .................................................... 41

2.3.2 Phosphate Rock Exports Rebounded Greatly, up 100.2% Year on Year...................... 42

2.3.3 Average Price of Phosphate Rock in the First Three Quarters was Low, and It Ascended

Greatly in the Fourth Quarter .................................................................................................. 43

2.3.4 2018 Phosphate Rock Output Would Reduce, Exports Would Ascend and Prices Would

Maintain at a High Level ......................................................................................................... 44

2.4 Analysis on Sulfur and Sulfuric Acid Market in 2017 .................................................. 45

2.4.1 2017 Sulfuric Acid Output Recorded 91.723 Million MT, up 4% Year on Year .............. 45

2.4.2 Sulfur Imports Recorded 11.236 Million MT, With a Slight Year-on-Year Decline ......... 45

2.4.3 Sulfur Prices Descended Greatly .................................................................................. 46

2.4.4 2018 Sulfuric Acid Output Would be 90 Million MT, and the Imports Would Rebound to

12 Million MT ........................................................................................................................... 47

3 Forecast and Analysis on Nitrogen Fertilizer Market, 2017-2018 .................... 48

3.1 Thanks to a Fall in N-fertilizer Production, Overproduction was Relieved in 2017 ...... 48

3.1.1 2017 N-Fertilizer Output Decreased by 12.5% Year on Year, and Urea Output was

Down 15.5% Year on Year ...................................................................................................... 48

3.1.2 N-Fertilizer Production is Mainly Distributed in Henan, Hubei and Shanxi, and Urea

Production is Mainly Located in Shanxi and Henan ............................................................... 49

3.1.3 Urea Companies’ Capacity Reduced Obviously, and Commissioning of Newly-Added

Capacity was Delayed ............................................................................................................ 50

3.2 A Slight Decrease of N-Fertilizer Consumption .......................................................... 53

3.2.1 Consumption of N-Fertilizer ........................................................................................... 53



3.2.1.1 Direct Consumption of N-Fertilizer by Province ................................................................... 53

3.2.1.2 Direct Consumption of N-Fertilizer by Crop Variety ............................................................. 53

3.2.2 Consumption of Urea ..................................................................................................... 54

3.2.2.1 Direct Consumption of Urea by Province .............................................................................54

3.2.2.2 Direct Consumption of Urea by Crop Variety ....................................................................... 55

3.3 Export Volume of Main N-Fertilizer Products Dropped and Price Increased in 2017 .. 55

3.3.1 Urea Export Volume Dropped and Price Increased ...................................................... 55

3.3.1.1 Urea Export Volume Decreased Greatly to 4.65 Million MT ................................................ 55

3.3.1.2 Urea Exports to India Decreased by 52.2% ...........................................................................56

3.3.1.3 Average Export Price of Urea up 10.2% Year on Year ........................................................... 57

3.3.1.4 Main Urea Exporters: CNAMPGC Holding and Linggu Chemical .......................................... 57

3.3.2 Ammonium Chloride Export Volume and Price Both Increased .................................... 58

3.3.2.1 Ammonium Chloride Export Volume Hit a Record High, up 14.1% Year on Year .................58

3.3.2.2 Main Countries of Destination: Malaysia and Vietnam ........................................................59

3.3.2.3 Average Export Price of Ammonium Chloride Showed V-Shaped Trend..............................59

3.3.2.4 Main Ammonium Chloride Exporters: Lianyunfang Meixin Chemical and Fujian Agricultural

Materials Xiamen Co., Ltd. ................................................................................................................60

3.3.3 Trade of Other N-Fertilizer Products ............................................................................. 61

3.3.3.1 Ammonium Sulfate Exports Fell to 4.65 Million MT .............................................................61

3.3.3.2 Ammonium Nitrate Exports Decreased Greatly to 203,000 MT ...........................................61

3.4 Changes in Urea Prices and Production Margins in 2018 .......................................... 62

3.4.1 Urea Prices up 21.7% Year on Year .............................................................................. 62

3.4.2 Urea Production Turned a Loss into Large Profits ........................................................ 63

3.5 N-Fertilizer Supply-Demand Balance and Forecast in 2018 ....................................... 64

3.5.1 2018 N-fertilizer and Urea Capacity and Output Both Would Continue to Drop Slightly64

3.5.2 2018 N-Fertilizer and Urea Consumption Would Go down Slightly .............................. 64

3.5.3 N-Fertilizer Exports Would Go Down Slightly ................................................................ 65

3.5.4 N-Fertilizer Prices and Production Margins Would Go up ............................................ 65

4 Analysis and Forecast on P-Fertilizer Sector in 2017 and 2018 ...................... 67

4.1 A slight Decline in P-Fertilizer Production in 2017 ...................................................... 67

4.1.1 P-Fertilizer Output Down 3.4% Year on Year ................................................................ 67

4.1.2 P-Fertilizer Production Mainly in Hubei, Guizhou, Sichuan and Yunnan Where

Phosphate Rock Resource is Rich ......................................................................................... 67

4.1.3 2017 P-Fertilizer Capacity Ascended Slightly, and the Companies Reduced and

Stopped Production ................................................................................................................ 68



4.2 A Slight Decrease of P-Fertilizer Consumption .......................................................... 70

4.2.1 Consumption of P-Fertilizer ........................................................................................... 70

4.2.1.1 Direct Consumption of P-Fertilizer by Province .................................................................... 70

4.2.1.2 Direct Consumption of P-Fertilizer by Crop Variety ............................................................. 71

4.2.2 Consumption of DAP ..................................................................................................... 71

4.2.2.1 Direct Consumption of DAP by Province ............................................................................. 71

4.2.2.2 Direct Consumption of DAP by Crop Variety ........................................................................ 72

4.3 Exports of Main P-Fertilizer Products in 2017 Hit a Record Low, and Export Price

Reduced Greatly .............................................................................................................. 73

4.3.1 DAP Export Volume Decreased and Export Price Ascended ....................................... 73

4.3.1.1 DAP Export Volume down 5.8% Year on Year ....................................................................... 73

4.3.1.2 India Still was the Biggest Country of Destination of China’s DAP Exports .......................... 73

4.3.1.3 Average Export Price of DAP was Up 40 US Dollars/MT From That in Early 2017 ................ 74

4.3.1.4 Main DAP Exporters: Guizhou Kailin Chemical and Yunnan Hongxiang Chemical ...............75

4.3.2 MAP Export Volume Increased and Export Price Stabilitized ....................................... 75

4.3.2.1 MAP Export Volume up 33.8% Year on Year.........................................................................75

4.3.2.2 MAP Exports Mainly to Brazil and Australia ......................................................................... 76

4.3.2.3 Average Export Price of MAP Was Almost the Same as that of 2016 ..................................77

4.3.2.4 Main DAP Exporters: Hubei Xiangyun Chemical, Yunnan Hongxiang Chemical and Yunnan

Yuntianhua. .......................................................................................................................................77

4.3.3 Trade of Other P-Fertilize Products ............................................................................... 78

4.3.3.1 SSP Exports Increased by 6.4% Year on Year ........................................................................ 78

4.3.3.2 TSP Exports up 46.9% Year on Year ......................................................................................79

4.4 Changes in Market and Production Margins of Ammonium Phosphate in 2017 ......... 79

4.4.1 MAP Prices in the Fourth Quarter Rose Greatly, and the Producer Turned a Loss into a

Profit ........................................................................................................................................ 79

4.4.1.1 MAP Prices in the Fourth Quarter Ascended Greatly ...........................................................79

4.4.1.2 MAP Producers Fell into a Loss in the First Ten Months of 2017, and Then Rebounded

Greatly ..............................................................................................................................................80

4.4.2 DAP Prices Maintained at a Low Level, and the Producers Had Meager Profits ......... 81

4.4.2.1 DAP Prices Showed the Stabilization-Down Trend ...............................................................81

4.4.2.2 Average Production Margin of DPA Was in a Deficit ............................................................81

4.5 P-Fertilizer Market Forecast in 2018 .......................................................................... 82

4.5.1 P-Fertilizer Output Would Go Down to 17.5 Million MT ................................................ 82

4.5.2 P-Fertilizer Consumption Would Increase Slightly to 15.3 Million MT .......................... 82



4.5.3 P-Fertilizer Exports Would Continue to Reduce, and Export Prices Would Maintain at a

Low Level ................................................................................................................................ 82

4.5.4 P-Fertilizer Prices and Production Margins Both Would Go Down ............................... 83

5 Analysis and Forecast on Potash Fertilizer Sector in 2017-2018 .................... 84

5.1 2017 Potash Output Topped 6.6 Million MT ............................................................... 84

5.1.1 Potash Output Recorded 6.792 Million MT, up 1.7% Year on Year ............................... 84

5.1.2 High Concentration of Potash Producing Areas ............................................................ 84

5.1.3 Newly-Added Potash Capacity was Limited, and 100,000-200,000 MT of Capacity was

Predicted to Exit ...................................................................................................................... 85

5.2 A Slight Decrease of K-Fertilizer Consumption .......................................................... 85

5.2.1 Consumption of K-Fertilizer ........................................................................................... 85

5.2.1.1 Direct Consumption of K-Fertilizer by Province ....................................................................85

5.2.1.2 Direct Consumption of K-Fertilizer by Crop ..........................................................................86

5.2.2 Consumption of MOP .................................................................................................... 87

5.2.2.1 Direct Consumption of MOP by Province ............................................................................. 87

5.2.2.2 Direct Consumption of MOP by Crop Variety ....................................................................... 87

5.3 2017 Potash Import Volume Increased and Import Price Stabilized ........................... 88

5.3.1 MOP Imports .................................................................................................................. 88

5.3.1.1 MOP Import Volume up 10.5% Year on Year ........................................................................88

5.3.1.2 Canada Became the Biggest Original Country of China’s MOP Imports ...............................89

5.3.1.3 Average Import Price of MOP Stabilized ...............................................................................90

5.3.1.4 Main MOP Importers: Sino-Agri Group, Sinal-Chem Group and Huaken International

Trading ..............................................................................................................................................91

5.3.2 SOP Import Volume Increased Slightly and Import Price Stabilized ............................. 91

5.3.2.1 SOP Imports Maintained at a Relatively Low Level ..............................................................91

5.3.2.2 Average Price of SOP Almost Stabilized ................................................................................ 92

5.4 Prices of Main Potash Products in 2017 Dropped and then Ascended ....................... 93

5.4.1 MOP Prices Dropped in the First Three Quarters and Rebounded in the Fourth Quarter93

5.4.2 SOP Price Dropped ....................................................................................................... 93

5.5 2018 Potash Market Forecast .................................................................................... 94

5.5.1 2018 Potash Output Would Reach 6.9 Million MT ........................................................ 94

5.5.2 2018 Potash Consumption Would Go up Slightly ......................................................... 94

5.5.3 Potash Imports Would Continue to Go up ..................................................................... 94

5.5.4 Potash Prices Would Maintain at a Low Level .............................................................. 95



6 Analysis and Forecast on Compound Fertilizer Sector in 2017-2018 ............. 96

6.1 2017 Complex Fertilizer Production Further Ascended .............................................. 96

6.1.1 Complex Fertilizer Output Increased Slightly to 74.3 Million MT .................................. 96

6.1.2 Newly-added Complex Fertilizer Capacity Almost Was New-Type Compound Fertilizer96

6.2 2016 NPK Consumption Increased Slightly ................................................................ 98

6.2.1 Consumption of Compound Fertilizer ............................................................................ 98

6.2.1.1 Direct Consumption of Compound Fertilizer by Province ....................................................98

6.2.1.2 Direct Consumption of Compound Fertilizer by Crop Variety ..............................................98

6.2.2 Consumption of NPK Compound Fertilizer ................................................................... 99

6.2.2.1 Direct Consumption of NPK Compound Fertilizer by Province .............................................99

6.2.2.2 Direct Consumption of NPK Compound Fertilizer by Crop Variety.....................................100

6.3 2017 NPK Import Volume and Import Price Stabilized ............................................. 101

6.3.1 NPK Imports Reduced Slightly .................................................................................... 101

6.3.2 Average Import Price of NPK Decreased by 75 US Dollars/MT ................................. 101

6.3.3 Main Original Countries of China’s NPK Imports:Russia, Norway and Belgium ........ 102

6.3.4 Main NPK Importers: Sinochem Group, Huaken International, Sino-Agri and CNCCC102

6.3.5 NPK Export Volume Still was Extremely Small ........................................................... 103

6.4 2017 NPK Prices Decreased Greatly Year on Year ................................................. 103

6.5 2018 Complex Fertilizer Market Forecast ................................................................ 104

6.5.1 Complex Fertilizer Output Would Ascend Slightly ....................................................... 104

6.5.2 Complex Fertilizer Consumption Would Go up Slightly, but the Growth Would Slow

Down ..................................................................................................................................... 104

6.5.3 Complex Fertilizer Imports Would go Up Slightly ........................................................ 105

6.5.4 Complex Fertilizer Prices Would Fluctuate at a High Level ........................................ 105

7 The Operation Status and Future Transformation Direction of The Fertilizer

Industry ................................................................................................................. 106

7.1 2017 Fertilizer Industry Saw a Recovery of Overall Profits, but Faced Bottlenecks .. 106

7.1.1 Revenues and Profits of Main Business of Fertilizer Industry Both Ascended Slightly106

7.1.2 Profits of Fertilizer Industry Improved .......................................................................... 107

7.1.3 Fertilizer Industry Had Difficulty in Growth and Faced Transformation and Upgrading108

7.2 Main Strategic Directions of Fertilizer Companies .................................................... 109

7.2.1 Upgrading of Fertilizer Product Structure .................................................................... 109

7.2.1.1 New-Type Fertilizers Fit in With Agricultural Modernization .............................................109

7.2.1.2 Profits of New-Type Fertilizer are Higher than Those of Traditional Fertilizer ....................110

7.2.1.3 Typical Case—Batian Ecological Technique .........................................................................111



7.2.2 Extension to Downstream Planting Industry ............................................................... 112

7.2.2.1 Owing to Huge Market Size, Agriculture Would Become the Main Source of Profits of

Fertilizer Companies .......................................................................................................................112

7.2.2.2 Agrochemical Service Focuses on Extending to the Whole Industrial Chain from Planting

Link ..................................................................................................................................................112

7.2.2.3 Typical Case——Xinyangfeng ..............................................................................................113

7.2.3 Transforming into an Agricultural Comprehensive Service Provider .......................... 115

7.2.3.1 Changes of Agricultural Environment Put Forward Higher Requirements on Service from

Fertilizer Companies .......................................................................................................................115

7.2.3.2 Transforming into an Agricultural Comprehensive Service Provider Faced Relatively Big

Challenges .......................................................................................................................................115

7.2.3.3 Typical Case——Jinfeng Community ...................................................................................116

Part Two Forecast and Analysis on Specialty Fertilizer Market, 2017-2018 .... 120

8 Specialty Fertilizer and the Characteristics of the industry in 2017 ............. 120

8.1 The Definition of Specialty Fertilizer ......................................................................... 120

8.2 Main Products and Definition ................................................................................... 120

8.2.1 Slow/Controlled Release Fertilizer .............................................................................. 120

8.2.2 Water Soluble Fertilizer ............................................................................................... 121

8.2.3 Bio-fertilizer .................................................................................................................. 121

8.2.4 Algae Fertilizer ............................................................................................................. 121

8.2.5 Bio-stimulant ................................................................................................................ 122

8.2.6 Soil-conditioner ............................................................................................................ 122

8.3 New-Type Fertilizer Industrial Development still Has Many Restrictive Factors ....... 122

8.3.1 high price、slow effect and low acceptance to new-type fertilizer. ............................. 123

8.3.2 messy market and unclear industrial standards .......................................................... 123

8.3.3 single sales channel .................................................................................................... 123

9 Forecast and Analysis on The Main Varieties of Specialty Fertilizer in 2017124

9.1 Slow/Controlled Release Fertilizer Industry .............................................................. 124

9.1.1 Slow/Controlled Release Fertilizer Main Products and Characteristics ...................... 124

9.1.2 Main Slow/Controlled Release Fertilizer Producers and Products ............................. 125

9.1.3 The Supply of Slow/Controlled Release Fertilizer ....................................................... 126

9.1.4 The Consumption of Slow/Controlled Release Fertilizer ............................................ 127

9.1.5 Main Producers of Slow/Controlled Release Fertilizer ................................................ 127

9.1.5.1 Kingenta .............................................................................................................................. 127



9.1.5.2 Shikefeng .............................................................................................................................128

9.1.5.3 Summit Fert ........................................................................................................................129

9.2 Water Soluble Fertilizer Industry .............................................................................. 129

9.2.1 Registered Water Soluble Fertilizer Products in China ............................................... 129

9.2.2 The Supply of Water Soluble Fertilizer ........................................................................ 130

9.2.3 The Consumption of Water Soluble Fertilizer .............................................................. 131

9.2.4 Main Producers of Water Soluble Fertilizer ................................................................. 132

9.2.4.1 Hebei Mengbang .................................................................................................................132

9.2.4.1 Hebei Mengbang .................................................................................................................132

9.2.4.2 Luxi Chemical ......................................................................................................................133

9.2.4.3 Kingenta ..............................................................................................................................134

9.3 Commercial Organic Fertilizer Sector ...................................................................... 135

9.3.1 Status of Source of Raw Materials of Commercial Organic Fertilizer ......................... 135

9.3.1.1 Source of Raw Materials of Commercial Organic Fertilizer ................................................135

9.3.1.2 Material Dispersion and Safety Become the Bottlenecks of Developing Commercial Organic

Fertilizer ..........................................................................................................................................136

9.3.2 The Supply of Commercial Organic Fertilizer ............................................................. 137

9.3.3 The consumption of Commercial Organic Fertilizer .................................................... 138

9.3.4 Analysis on Key Commercial Organic Fertilizer Companies and Product Features ... 139

9.3.4.1 Jinggeng Tianxia Agricultural Science and Technology .......................................................139

9.3.4.2 Tianhui Ecological ...............................................................................................................140

10 Analysis on Other Specialty Fertilizer in 2017 .............................................. 141

10.1 Bio-fertilizer ............................................................................................................ 141

10.2 Alginic Acid Fertilizer ............................................................................................. 141

10.3 Bio-stimulant .......................................................................................................... 142

10.4 Soil Conditioner ..................................................................................................... 142

Part Three Analysis on Listed Fertilizer Companies and Industry Investment144

11 Analysis on Listed Fertilizer Companies in 2017 ......................................... 144

11.1 Analysis on Key N-Fertilizer Companies ................................................................ 144

11.1.1 Luxi Chemical ............................................................................................................ 144

11.1.1.1 Basic Profile .......................................................................................................................144

11.1.1.2 Key Competitive Factors....................................................................................................145

11.1.1.3 Investment Trends .............................................................................................................146

11.1.1.4 Analysis on Operating Performance ..................................................................................146



11.1.2 Sichuan Meifeng ........................................................................................................ 146

11.1.2.1 Basic Profile .......................................................................................................................146



11.1.2.4 Analysis on Operating Conditions .....................................................................................148

11.1.3 Hualu-Hengsheng Chemical ...................................................................................... 148

11.1.3.1 Basic Profile .......................................................................................................................148



11.1.4 Chitianhua .................................................................................................................. 150

11.1.4.1 Chitianhua .........................................................................................................................150




11.1.5 Sichuan Chemical ...................................................................................................... 152

11.1.5.1 Basic Profile ....................................................................................................................... 152




11.1.6 Yihua Group ............................................................................................................... 154

11.1.6.1 Basic Profile .......................................................................................................................154



11.1.7 Xinlianxin .................................................................................................................... 156

11.1.7.1 Basic Profile .......................................................................................................................156


11.1.7.3 Analysis on Operating Conditions ..................................................................................... 157

11.1.8 Huachang Chemical................................................................................................... 157

11.1.8.1 Basic Profile ....................................................................................................................... 157



11.2 Analysis on Key P-Fertilizer Companies ................................................................ 159

11.2.1 Yuntianhua ................................................................................................................. 159

11.2.1.1 Basic Profile .......................................................................................................................159






11.2.2 Liuguo Chemical ........................................................................................................ 161

11.2.2.1 Basic Profile .......................................................................................................................161



11.2.3 Chuanjinnuo Chemical ............................................................................................... 164

11.2.3.1 Basic Profile .......................................................................................................................164



11.2.4 Wengfu Group ............................................................................................................ 165

11.3 Analysis on Key Potash Companies ...................................................................... 166

11.3.1 Salt Lake Industry ...................................................................................................... 166

11.3.1.1 Basic Profile .......................................................................................................................166

11.3.1.2 Key Competitive Factors.................................................................................................... 167


11.3.2 SDIC Xinjiang Luobupo Potash ................................................................................. 168

11.3.2.1 Basic Profile .......................................................................................................................168



11.3.3 Zangge Holding Limited ............................................................................................. 169

11.3.3.1 Basic Profile .......................................................................................................................169



11.4 Analysis on Key Compound Fertilizer Companies .................................................. 171

11.4.1 Kingenta ..................................................................................................................... 171

11.4.1.1 Basic Profile ...................................................................................................................... 171


11.4.1.3 Investment Trends ............................................................................................................. 173


11.4.2 Xinyangfeng ............................................................................................................... 174

11.4.2.1 Basic Profile ....................................................................................................................... 174






11.4.3 Batian Ecological Technique ...................................................................................... 177

11.4.3.1 Basic Profile .......................................................................................................................177




11.4.4 Stanley ....................................................................................................................... 180

11.4.4.1 Basic Profile .......................................................................................................................180




11.4.5 Sierte .......................................................................................................................... 183

11.4.5.1 Basic Profile .......................................................................................................................183




11.4.6 Wintrue Holding ......................................................................................................... 185

11.4.6.1 Basic Profile .......................................................................................................................185




11.4.7 Sinofert ....................................................................................................................... 187

11.4.7.1 Basic Profile ....................................................................................................................... 187




11.5 Analysis on Other Fertilizer Companies ................................................................. 190

11.5.1 Fubang ....................................................................................................................... 190

11.5.1.1 Basic Profile .......................................................................................................................190




11.5.2 Genliduo Bio-Tech ...................................................................................................... 192

11.5.2.1 Basic Profile ....................................................................................................................... 192






11.5.3 Taigu Biological .......................................................................................................... 194

11.5.3.1 Basic Profile .......................................................................................................................194




12 Investment Analysis of Chinese Fertilizer Industry in 2017 ........................ 197

12.1 Subsidy Polices for Investment Projects in Fertilizer Industry in 2017 .................... 197

12.1.1 Subsidy Polices for Formulated Fertilization by Soil Testing .................................... 197

12.1.2 Subsidy Policy for Land Protection and Quality Improvement .................................. 197

12.1.3 Supporting Policies for Utilization of Waste Resources from Planting and Farming 198

12.1.4 Subsidy Policy for Organic Fertilizer Instead of Fertilizer for Fruits, Vegetables and Tea

.............................................................................................................................................. 198

12.2 Investment Projects in Fertilizer Industry in 2017 ................................................... 198

12.2.1 Investment Direction .................................................................................................. 198

12.2.2 Investment Area ......................................................................................................... 199

12.2.3 Investment Enterprise ................................................................................................ 199

List of Tables

Table 1-1, Comparison of Standards for Pollution Discharge Fees and Environmental Taxes

......................................................................................................................................................31

Table 1-2, Comparison of Duties of NPK Exports .........................................................................34

Table 3-1, By the end of 2017, Reduction of Output in Mainly Urea Enterprises. .................... 51

Table 3-2, China Main Urea Exporters (2016-2017) .....................................................................58

Table 3-3, China Main Ammonium Chloride Exporters (2016-2017) ..........................................60

Table 3-4, China Nitrogenous Fertilizer Supply and Demand, 2011-2018 ................................66

Table 3-5, China Urea Supply and Demand, 2011-2018 .............................................................66

Table 4-1, By the end of 2017, Reduction of Output in Mainly MAP Enterprises. ....................69

Table 4-2, By the end of 2017, Reduction of Output in Mainly DAP Enterprises. .................... 70

Table 4-3, China Main DAP Exporters (2016-2017) .....................................................................75

Table 4-4, China Main Map Exporters (2016-2017) ...................................................................... 78

Table 4-5, China Phosphate Fertilizer Supply and Demand, 2011-2018 ...................................83

Table 5-1, China Main MOP Importers (2016-2017) .....................................................................91



Table 5-2, China Potash Fertilizer Supply and Demand, 2011-2018 .........................................95

Table 6-1, By the end of 2017, Reduction of Output in Mainly Complex Fertilizer Enterprises

...................................................................................................................................................... 97

Table 6-2, 2017 Compound Fertilizer Capacity Newly Built and Proposed ............................... 97

Table 6-3, China Main NPK Importers (2016-2017) ....................................................................103

Table 7-1, Cost and Benefit of Each Fertilizer Industry ..............................................................108

Table 7-2, The Main Business Income and Net Profit of Each Fertilizer Industry ..................110

Table 7-3, R&D Input Ratio of Main Compound Fertilizer Enterprises .....................................111

Table 7-4, Trends of Newyangfeng’s Extension to Downstream Industry ...............................114

Table 9-1, China Main Slow/controlled release fertilizer Producers and Products .................126

Table 9-2, Affiliated Slow/Controlled Release Fertilizer Enterprises of Kingenta ...................128

Table 9-3, Affiliated Water Soluble Fertilizer Enterprises of Kingenta ......................................135

Table 9-4, Source of Raw Materials of Commercial Organic Fertilizer ....................................136

Table 9-5, Main Subsidiaries of Jianggeng Tianxia .....................................................................139

Table 11-1, Shangdong Luxi Chemical Group’s Urea Subsidiaries ..........................................145

Table 11-2, The Revenue and Gross Profit Rate of Luxi Chemical Group, 2014-2017 .........146

Table 11-3, Sichuan Meifeng’s Urea Subsidiaries ....................................................................... 147

Table 11-4, The Revenue and Gross Profit Rate of Sichuan Meifeng, 2014-2017 ................148

Table 11-5, The Revenue and Gross Profit Rate of Hualu Hengsheng, 2014-2017 ..............150

Table 11-6, The Revenue and Gross Profit Rate of Chitianhua, 2014-2017 ........................... 152

Table 11-7, The Revenue and Gross Profit Rate of Chuahua Stock, 2014-2017 ...................153

Table 11-8, The Revenue and Gross Profit Rate of Hubei Yihua, 2014-2017 ........................156

Table 11-9, The Revenue and Gross Profit Rate of Xinlianxin, 2014-2017 ............................. 157

Table 11-10, The Revenue and Gross Profit Rate of Huachang Chemical, 2014-2017 ........158

Table 11-11, Yuntianhua Group’s Ammonium Phosphate Subsidiaries ...................................160

Table 11-12, Investment Trends of Yuntianhua............................................................................161

Table 11-13, The Revenue and Gross Profit Rate of Yuntianhua, 2014-2017 ........................161

Table 11-14, Liuguo Chemical’s Ammonium Phosphate Subsidiaries ..................................... 162

Table 11-15, The Revenue and Gross Profit Rate of Liuguo Chemical, 2014-2017 ..............163

Table 11-16, The Revenue and Gross Profit Rate of Chuanjinnuo, 2014-2017 .....................165

Table 11-17, Wengfu’s Ammonium Phosphate Subsidiaries .....................................................165

Table 11-18, The Revenue and Gross Profit Rate of Salt Lake Industry Group, 2014-2017 167

Table 11-19, The Revenue and Net profit of Xinjiang Luobupo Potassium Salt, 2014-2017 169

Table 11-20, The Revenue and Gross Profit Rate of Zangge Holding Limited, 2015-2017 .. 170



Table 11-21, Location and Capacity of Kingenta’s Compound Fertilizer Producers .............. 172

Table 11-22, Investment Trends of Tingenta ................................................................................ 173

Table 11-23, The Revenue and Gross Profit Rate of Kingenta, 2014-2017 ............................ 174

Table 11-24，Investment Trends of Xinyangfeng ....................................................................... 176

Table 11-25, The Revenue and Gross Profit Rate of Xinyangfeng, 2014-2017 ......................177

Table 11-26, Batian’s Compound Fertilizer Subsidiaries ............................................................ 178

Table 11-27, Investment Trends of Batian Ecological Technique .............................................. 179

Table 11-28, The Revenue and Gross Profit Rate of Tatian Stock, 2014-2017 ......................180

Table 11-29, Location and Capacity of Stanley’s Compound Fertilizer Producing Subsidiaries

....................................................................................................................................................182

Table 11-30, Investment Trends of Stanley ..................................................................................182

Table 11-31, The Revenue and Gross Profit Rate of Stanley, 2014-2017 ...............................183

Table 11-32, Investment Trends of Sierte .....................................................................................184

Table 11-33, The Revenue and Gross Profit Rate of Sierte, 2014-2017 .................................185

Table 11-34, Location and Capacity of Shindoo Chemi-Industry’s NPK Subsidiaries ...........186

Table 11-35, Investment Trends of Wintrue Holding ................................................................... 187

Table 11-36, The Revenue and Gross Profit Rate of Wintrue Holding, 2014-2016 ............... 187

Table 11-37, The main holding enterprises and production capacity distribution of Sinofert 188

Table 11-38, The Revenue and Gross Profit Rate of Sinofert, 2014-2017 ..............................190

Table 11-39, Investment Trends of Fubang ..................................................................................191

Table 11-40, The Revenue and Gross Profit Rate of Fubang Stock, 2014-2017 ................... 192

Unit:RMB 000 Million ....................................................................................................................... 192

Table 11-41, The Revenue and Gross Profit Rate of Genliduo, 2014-2017 ............................194

Table 11-42, Wholly-owned Subsidiaries of Gutai Biological .....................................................195

Table 11-43, The Revenue and Gross Profit Rate of Taigu Biology, 2014-2017 ....................196

Table 12-1, Investment Project of China Fertilizer Industry in 2017 .........................................200

Attached Table 2-1, China’s Synthetic Ammonia Output by Month, 2012-2017 ..................... 202

Attached Table 2-2, Synthetic Ammonia Output by Province, 2012-2017 ............................... 202

Attached Table 2-3, China Synthetic Ammonia Imports by Month, 2012-2017.......................203

Attached Table 2-4, China’s Rock Phosphate Output by Month, 2012-2017 ..........................204

Attached Table 2-5, China’s Rock Phosphate Export by Month, 2012-2017 ..........................204

Attached Table 2-6, China’s Sulfuric Acid Output by Month, 2012-2017 .................................205

Attached Table 2-7, Sulfur Imports by Month, 2012-2017 ..........................................................205

Attached Table 3-1, China’s N-fertilizer Output by Province, 2012-2017 ................................206



Attached Table 3-2, China’s N-fertilizer Output by Month, 2012-2017 ..................................... 207

Attached Table 3-3, China’s Urea Output by Province, 2012-2017 .......................................... 207

Attached Table 3-4, China’s Urea Output by Month, 2012-2017 ..............................................208

Attached Table 3-5, Direct Consumption of N- Fertilizer by Province, 2011-2016 .................209

Attached Table 3-6, Direct Consumption of N- Fertilizer by Crop Variety, 2011-2016 ...........210

Attached Table 3-7, Direct Consumption of Urea by Province, 2011-2016 .............................211

Attached Table 3-8, Direct Consumption of Urea by Crop Variety, 2011-2016 .......................212

Attached Table 3-9, China’s Urea Exports by Month, 2012-2017 .............................................213

Attached Table 3-10, China’s Ammonium Chloride Exports by Month, 2012-2017................213

Attached Table 3-11, China’s Ammonium Sulfate Exports by Month, 2012-2017 ..................214

Attached Table 3-12, China’s Ammonium Nitrate Exports by Month, 2012-2017 ...................214

Attached Table 4-1, China’s P-fertilizer Output by Province, 2012-2017 .................................215

Attached Table 4-2, China’s P-fertilizer Output by Month, 2012-2017 .....................................216

Attached Table 4-3, Direct Consumption of P- Fertilizer by Province, 2011-2016 ................. 217

Attached Table 4-4, Direct Consumption of P- Fertilizer by Crop Variety, 2011-2016 ...........218

Attached Table 4-5, Direct Consumption of DAP by Province, 2011-2016 ..............................219

Attached Table 4-6, Direct Consumption of DAP by Crop Variety, 2011-2016 ........................220

Attached Table 4-7, China’s DAP Exports by Month, 2012-2017 .............................................221

Attached Table 4-8, China’s MAP Exports by Month, 2012-2017 .............................................221

Attached Table 4-9, China’s SSP Exports by Month, 2012-2017 ..............................................222

Attached Table 4-10, China’s TSP Exports by Month, 2012-2017 ............................................222

Attached Table 5-1, China’s K-fertilizer Output by Month, 2012-2017 .....................................223

Attached Table 5-2, China’s K-fertilizer Output by Province, 2012-2017 .................................223

Attached Table 5-3, Direct Consumption of K- Fertilizer by Province, 2011-2016 .................224

Attached Table 5-4, Direct Consumption of K- Fertilizer by Crop Variety, 2011-2016 ...........225

Attached Table 5-5, Direct Consumption of MOP by Province, 2011-2016 .............................226

Attached Table 5-6, Direct Consumption of MOP by Crop Variety, 2011-2016 ....................... 227

Attached Table 5-7, China’s MOP Imports by Month, 2012-2017 .............................................228

Attached Table 5-8, China’s SOP Imports by Month, 2012-2017 .............................................228

Attached Table 6-1, Direct Consumption of Compound Fertilizer by Province, 2011-2016 ..229

Attached Table 6-2, Direct Consumption of Compound Fertilizer by Crop Variety, 2011-2016

....................................................................................................................................................230

Attached Table 6-3, Direct Consumption of NPK Compound Fertilizer by Province, 2011-2016

....................................................................................................................................................231



Attached Table 6-4, Direct Consumption of NPK Compound Fertilizer by Crop Variety,

2011-2016 ..................................................................................................................................232

List of Figures

Fig.1-1,Changes in Lowest Purchase Price of Wheat, 2006-2018 .............................................24

Fig.1-2,Changes in Lowest Purchase Price of Rice, 2006-2018 ................................................24

Fig.1-3,Changes in NPK Exports, 2012-2017 ................................................................................34

Fig.2-1,Changes in Raw Coal Output in China, 2007-2017 ........................................................35

Fig.2-2,Changes in Coal Imports in China,2007-2017 .................................................................36

Fig.2-3, Average Ex-factory Price of Anthracite (Q:6000), 2016-2017 ....................................... 37

Fig.2-4, Changes in Synthetic Ammonia Output in China, 2007-2017 ......................................38

Fig.2-5, Synthetic Ammonia Output by Province, 2017 ................................................................38

Fig.2-6, Changes in Synthetic Ammonia Imports in China, 2008-2017 .....................................39

Fig.2-7, Average Factory Prices of Synthetic Ammonia, 2016-2017 ..........................................40

Fig.2-8, Changes in Rock Phosphate Output in China, 2007-2017 ...........................................41

Fig.2-9, Synthetic Rock Phosphate Output by Province, 2017 ...................................................42

Fig.2-10, Changes in Rock Phosphate Exports in China, 2015-2017 ........................................43

Fig.2-11, Average Factory Prices of 30% Rock Phosphate, 2016-2017 ....................................44

Fig.2-12, Changes in Sulfuric Acid Output in China, 2007-2017 ................................................45

Fig.2-13, Changes in Sulfur Imports in China, 2008-2017 ...........................................................46

Fig.2-14, Average Factory Prices of Solid Sulfur, 2016-2017 ......................................................46

Fig.3-1, Changes in N-fertilizer Output in China, 2007-2017 ......................................................48

Fig.3-2, Changes in Urea Output in China, 2007-2017 ................................................................49

Fig.3-3, Proportion of N-fertilizer Output of Each Province, 2017 ..............................................49

Fig.3-4, Proportion of Urea Output of Each Province, 2017 ........................................................50

Fig.3-5, Direct Consumption of N-Fertilizer by Province, 2016 ................................................... 53

Fig.3-6, Direct Consumption of N-Fertilizer by Crop, 2016 ..........................................................54

Fig.3-7, Direct Consumption of Urea by Province, 2016 ..............................................................54

Fig.3-8, Direct Consumption of Urea by Crop, 2016..................................................................... 55

Fig.3-9, Changes of China’s Urea Exports, 2001-2017 ................................................................56

Fig.3-10, Changes of Urea Export Countries, 2008-2017 ........................................................... 57

Fig.3-11, China Urea FOB Price by Month, 2014-2017................................................................ 57

Fig.3-12, Changes of China Ammonium Chloride Export, 2007-2017 .......................................59



Fig.3-13, Changes of Ammonium Chloride Export Countries, 2010-2017 ................................59

Fig.3-14, China Ammonium Chloride Export FOB Price by Month, 2015-2017 .......................60

Fig.3-15, Changes of China Ammonium Sulfate Export, 2007-2017 .........................................61

Fig.3-16, Changes of China Ammonium Nitrate Export, 2007-2017 .......................................... 62

Fig.3-17, Ex-factory Price of Urea, 2013-2017 ..............................................................................63

Fig.3-18, Average Urea Production Profit in Shanxi, 2015-2017 ................................................64

Fig.4-1, Changes in P-fertilizer Output in China, 2007-2017 ....................................................... 67

Fig.4-2, Proportion of P-fertilizer Output of Each Province, 2017 ...............................................68

Fig.4-3, Direct Consumption of P-Fertilizer by Province, 2016 .................................................. 71

Fig.4-4, Direct Consumption of P-Fertilizer by Crop, 2016 ......................................................... 71

Fig.4-5, Direct Consumption of DAP by Province, 2016 .............................................................. 72

Fig.4-6, Direct Consumption of DAP by Crop, 2016 ..................................................................... 72

Fig.4-7, Changes of China’s DAP Exports, 2007-2017 ................................................................ 73

Fig.4-8, Changes of DAP Export Countries, 2009-2017 .............................................................. 74

Fig.4-9, China DAP Export FOB Price by Month, 2014-2017 ..................................................... 74

Fig.4-10, Changes of China’s MAP Exports, 2007-2017 ............................................................. 76

Fig.4-11, Changes of MAP Export Countries, 2009-2017 ............................................................ 76

Fig.4-12, China MAP Export FOB Price by Month, 2015-2017 ...................................................77

Fig.4-13, Changes of China’s Other SSP Exports, 2007-2017 ................................................... 78

Fig.4-14, Changes of China’s TSP Exports, 2007-2016 ..............................................................79

Fig.4-15, Factory Prices of MAP (55% powder) in Major Provinces, 2014-2017 .....................80

Fig.4-16, Average MAP Production Profit, 2015-2017 ..................................................................80

Fig.4-17, Factory Prices of 64% DAP, 2014-2017 .........................................................................81

Fig.4-18, Average DAP Production Profit, 2015-2017 .................................................................. 82

Fig.5-1, Changes in K-fertilizer Output in China, 2007-2016 .......................................................84

Fig.5-2, Proportion of K-fertilizer Output of Each Province, 2017 ...............................................85

Fig.5-3, Direct Consumption of K-Fertilizer by Province, 2016 ...................................................86

Fig.5-4, Direct Consumption of K-Fertilizer by Crop Variety, 2016 .............................................86

Fig.5-5, Direct Consumption of MOP by Province, 2016 ............................................................. 87

Fig.5-6, Direct Consumption of MOP by Crop Variety, 2016 .......................................................88

Fig.5-7, Changes of China’s MOP Imports, 2007-2017 ...............................................................89

Fig.5-8, China’s MOP Imports by Country, 2009-2017 .................................................................90

Fig.5-9, China MOP Import CIF Price by Month, 2015-2017 ......................................................90

Fig.5-10, China’s SOP Imports, 2007-2017 ................................................................................... 92



Fig.5-11, China SOP Import CIF Price by Month, 2015-2017 ..................................................... 92

Fig.5-12, Prices of Domestic 60% MOP and Imported Potassium, 2015-2017 ........................93

Fig.5-13, Prevailing Price of SOP (50% Powder and 50% Granulated), 2015-2017 ...............94

Fig.6-1, Changes in Compound Fertilizer Output in China, 2006-2017 .....................................96

Fig.6-2, Direct Consumption of Compound Fertilizer by Province, 2016 ..................................98

Fig.6-3, Direct Consumption of Compound Fertilizer by Crop Variety, 2016 ............................99

Fig.6-4, Direct Consumption of NPK Compound Fertilizer by Province, 2016 .......................100

Fig.6-5, Direct Consumption of NPK Compound Fertilizer by Crop Variety, 2015 .................100

Fig.6-6, NPK Compound Fertilizer Imports, 2007-2017 .............................................................101

Fig.6-7, China NPK Compound Fertilizer Import CIF Price by Month, 2015-2017 ................101

Fig.6-8, NPK Compound Fertilizer Imports by Country, 2009-2017 ......................................... 102

Fig.6-9, NPK Compound Fertilizer Exports, 2007-2017 .............................................................103

Fig.6-10, Average Factory Price of 45%CL (15-15-15) and 45% S (15-15-15) NPK,

2015-2017 .................................................................................................................................104

Fig 7-1, The Main Business Income of Each Fertilizer Industry,2012-2017 ............................ 107

Fig 7-2, Net Profit of Each Fertilizer Industry, 2013-2017 .......................................................... 107

Fig 7-3, The Transformation of The Traditional Fertilizer Industry ............................................109

Fig 7-4, Gross Margin by Product of Kingenta, 2012-2016 .......................................................110

Fig 7-5, Change of output value of China's Agriculture, 2010-2017 .........................................112

Fig 7-6, A Complete Industrial Chain of Jinfeng Commune ....................................................... 117

Fig 7-7, Mode of Operation Jinfeng Commune ...........................................................................118

Fig 9-1, Number of Registered Slow/Control Release Fertilizer Products in China, 2006-2017

....................................................................................................................................................125

Fig 9-2, The Capacity and Outputs of Slow/Controlled Release Fertilizer in China, 2006-2020

.................................................................................................................................................... 127

Fig 9-3, Number of Registered Water Soluble Fertilizer Products in China, 2017 .................130

Fig 9-4, The Capacity and Outputs of Water Soluble Fertilizer in China (2009-2020) ..........131

Fig 9-5, The Consumption of Water Soluble Fertilizer in China (2009-2020) .........................132

Fig 9-6,The scale of organic fertilizer enterprises .......................................................................138

Fig 11-1, Shareholding structure of Luxi Chemical .....................................................................145

Fig 11-2, Shareholding structure of Sichuan Meifeng ................................................................. 147

Fig 11-3, Shareholding structure of Hualu Hengsheng ..............................................................149

Fig 11-4, Shareholding structure of Chitianhua ...........................................................................151

Fig 11-5, Shareholding structure of Chuahua Stock ...................................................................153



Fig 11-6, Shareholding structure of Hubei Yihua .........................................................................155

Fig 11-7, Shareholding structure of Huachang Chemical ..........................................................158

Fig 11-8, Shareholding structure of Yuntianhua ..........................................................................160

Fig 11-9, Shareholding structure of Liuguo Chemical .................................................................163

Fig 11-10, Shareholding structure of Chuanjinnuo Chemical ....................................................164

Fig 11-11, Shareholding structure of Salt Lake Industry Group ................................................ 167

Fig 11-12, Shareholding structure of SDIC Xinjiang Luobupo Potassium Salt .......................168

Fig 11-13, Shareholding structure of Zangge Holding Limited .................................................. 170

Fig 11-14, Shareholding structure of Kingenta ............................................................................ 173

Fig 11-15, Shareholding structure of Xinyangfeng ...................................................................... 175

Fig 11-16, Shareholding structure of Batian Ecological Technique .......................................... 179

Fig 11-17, Shareholding structure of Stanley ...............................................................................181

Fig 11-18, Shareholding structure of Sierte ..................................................................................184

Fig 11-19, Shareholding structure of Wintrue Holding ................................................................186

Fig 11-20, Shareholding structure of Genliduo ............................................................................193

Fig 11-21, Shareholding structure of Taigu Biological ................................................................195

Analysis and Forecast on China Fertilizer Industry (2017-2018)


……

3.1 Thanks to a Fall in N-fertilizer Production, Overproduction was

Relieved in 2017

3.1.1 2017 N-Fertilizer Output Decreased by 12.5% Year on Year, and Urea

Output was Down 15.5% Year on Year

N-fertilizer and urea output kept decreasing in 2017. N-fertilizer output decreased greatly to

41.16 million MT, down 12.5% year on year. Urea output went down to 27.165 million MT,

down 15.5% year on year. The main reasons for a fall in output are: first, due to an increase in

production costs, more companies cut down production; second, owing to a drop in demand

from agriculture and industry and difficulty on exporting, the companies were less willing to

raise output; third, more companies changed to produce high-profit products such as

methanol and liquid ammonia and cut down urea output; fourth, because of strict

environmental policies, the operating rate of urea was relatively low and was less than 50%.

Fig.3-1, Changes in N-fertilizer Output in China, 2007-2017

0

10,000

20,000

30,000

40,000

50,000

60,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

49,45847,020

41,160

Nutrient, Unit: 000MT

Data Source: State Statistics Bureau



Fig.3-2, Changes in Urea Output in China, 2007-2017

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

34,652

32,153

27,165

Nutrient, Unit: 000MT


3.1.2 N-Fertilizer Production is Mainly Distributed in Henan, Hubei and Shanxi,

and Urea Production is Mainly Located in Shanxi and Henan

Henan, Hubei, Shanxi, Shandong and Sichuan still are the main producing areas of

N-fertilizer in China. N-fertilizer output in these five provinces was 4.536 million MT, 4.208

million MT, 3.708 million MT, 3.532 million MT and 2.723 million MT, accounting for 11%,

10.2%, 9%, 8.6% and 6.6% of the national total.

Fig.3-3, Proportion of N-fertilizer Output of Each Province, 2017

Hubei, 4,208 , 10.2%

Henan, 4,536 , 11.0%Shanxi, 3,708 , 9.0%Shandong, 3,532 ,

8.6%

Sichuan, 2,723 , 6.6%

Xinjiang, 1,903 , 4.6%

Hebei, 2,406 , 5.8%

Inner Mongolia, 3,719 , 9.0%

Guizhou, 1,850 , 4.5%

Anhui, 1,958 , 4.8%

Jiangsu, 1,744 , 4.2%Shaanxi, 1,165 , 2.8%

Chongqing, 1,110 , 2.7%

Others, 6,599 , 16.0%




Urea output in top 5 provinces:Shanxi, Henan, Shandong, Inner Mongolia and Xinjiang was

3.635 million MT, 3.40 million MT, 3.104 million MT, 2.978 million MT and 2.155 million MT

respectively, taking up 13.4%, 12.5%, 11.4%, 11% and 7.9%. Because of overcapacity and

strict environmental policies, some capacity in various producing areas exited and the output

reduced except for Inner Mongolia.

Fig.3-4, Proportion of Urea Output of Each Province, 2017

Shanxi, 3400.3, 12.5%

Henan, 3634.5, 13.4%

Shandong, 3103.6, 11.4%

Xinjiang, 2155.3, 7.9%

Hebei, 1615.5, 5.9%

Inner Mongolia, 2977.9, 11.0%

Hubei, 795.5, 2.9%

Sichuan, 1389.4, 5.1%

Anhui, 1309.5, 4.8% Jiangsu, 997.9, 3.7%

Shaanxi, 1029.0, 3.8%

Jiangxi, 847.7, 3.1%

Yunnan, 639.6, 2.4%

Others, 3,269 , 12.0%


3.1.3 Urea Companies’ Capacity Reduced Obviously, and Commissioning of

Newly-Added Capacity was Delayed

After a continuous drop in prices in 2016, some mid-low-end capacity exited, and two main

N-fertilizer products such as liquid ammonia and urea both saw a drop in capacity and

production. Effective capacity of urea in 2017 was predicted to be around 73 million MT, of

which the number of large producers with production at half million MT is 67, accounting for

71% of urea production capacity. Due to suspension of approval of new hazardous chemical

projects in Shandong, the commissioning date of Luxi Chemical’s 0.6-million-ton ammonia

and 1-million-ton urea project was delayed; besides, Boyuan Group’s 0.3-million-ton

ammonia and 0.52-million-ton urea project planned to run in October, but the commissioning

date also was delayed.



……

7.1.3 Fertilizer Industry Had Difficulty in Growth and Faced Transformation and

Upgrading

Currently, traditional fertilizer sectors is experiencing an oversupply, and operating revenues

and profits both shrink seriously. Since 2017, the growth and and profits of fertilizer industry

have hardly increased and even dropped slightly in the last 5 years.

Besides, fertilizer industry also faced serious agricultural non-point source pollution such as

soil hardening and acidification, water eutrophication and food safety, as well as adjustments

of industry policies, strengthening regulations from environmental departments, planing of

zero growth in use of fertilizer and organic fertilizer for fruits, tea and vegetables, and

cancellation of preferential policies for electricity, natural gas and transportation, so

transformation and upgrading become inevitable choices of fertilizer industry.

Fig 7-3, The Transformation of The Traditional Fertilizer Industry

Source: BOABC

……

11.4.2 Xinyangfeng

11.4.2.1 Basic Profile

Production bases: it has 9 large modern P-fertilizer and compound fertilizer production



bases located in Jingmeng, Yichang and Zhongxiang of Hubei, Leibo of Sichuan, Heze of

Shandong, Xushui of Hebei, Binyang of Guangxi, Jiujiang of Jiangxi and Fuyu of Jilin, with

annual high concentration P-fertilizer and compound fertilizer capacity of 7 million MT,

low-grade ore washing capacity of 3.2 million MT, annual ammonia capacity of 0.15 million

MT/year, sulfuric acid capacity of 2.8 million MT/year, SOP capacity of 0.15 million MT/year

and nitric acid capacity of 0.15 million MT.

Main products: it has 6 serious, including 200 products such as MAP, SOP compound

fertilizer, urea-based compound fertilizer, high tower compound fertilizer, BB fertilizer and

organic-inorganic complex fertilizer, which can meet the demand from different crops in

various places.

Sales areas: sales areas are uniform, 20% in the northeast, 27% in north China and 27% in

south China, as well as 5% in foreign markets.

Sales models: it adopts the marketing strategies of dual-brand (“Yangfeng” and “Aoteer”)

and double network, as well as integration marketing model involving in county-level agents,

network distribution in towns and villages, and direct selling to surrounding bases, specialized

households, large growers, wholesalers and retailers. Along with marketing network

distribution and horizontal channel management, it has currently owned huge marketing

networks in every corners of villages and towns, including 4,100 county-level agents and

52,000 networks in villages and towns.



Fig 11-15, Shareholding structure of Xinyangfeng

Hubei Yangfeng, 47.53%Yangcaixue, 4.55%

Huaao international trust,

2.75%

Other, 45.17%

Data Source: Listing Particulars

11.4.2.2 Key Competitive Factors

It has the advantages of material procurement and transportation costs, rich product structure,

and well-known brands “Yangfeng” and “Aoteer”, and R & D technology of new-type fertilizer.

11.4.2.3 Investment Trends

Table 11-24，Investment Trends of Xinyangfeng

Time Amount

(RMB Millon) Introduction of Project Field

2017.2 40

A plan of acquiring a 51% stake in Jiangsu Lvgang

with 399 million RMB in July 2016, which was

changed to acquire a 10% stake in Jiangsu

Lvgang in February, 2017

vegetable and modern

agricultural equipment service

2017.1

strategic cooperation on agricultural meteorology

with Xiangji Zhiyuan (Wuhan) Technology and

Huafeng Xiangji (Beijing) Agricultural Meteorology

Technology

agricultural meteorology service

2017.4

Cooperation on R & D, production and promotion

of new-type fertilizer with leading biological

companies

new-type fertilizer (seaweed

fertilizer, biological nitrogen

fixation)



2017.7 50 Establishment of Sichuan Leibo Xinyangfeng Fruit

Industry Development Co., Ltd.

fruit growing and marketing

2017.8

strategic cooperation on sharing channels and

perfecting service systems with Jifeng Agricultural

Machinery Chain

agricultural machinery service

2017.10 the building of Xinyangfeng Peirui (Beijing)

Eco-agricultural Technology

fruit and vegetable planting and

marketing


11.4.2.4 Analysis on Operating Conditions

Operating revenues reached 9.178 billion RMB, up 10.89% year on year; the net profits

attributable to the listed company registered 682 million RMB, up 21.04% year on year.

The main reasons for an increase in performance: first, it strengthened marketing and

technical creation, improving channel stickiness; second, it further optimized product

structure and promoted new-type fertilizer to meet diversified demand from terminal markets,

which efficiently increased the sales; third, along with the upgrading of management, a

reduction in costs and an increase in profits, the advantage of integration industrial chain was

continuing and anti-risk capability and cost advantage were further highlighted when there

are obvious fluctuation in material prices, which finally improved the revenues and profits of

P-fertilizer and compound fertilizer.

Table 11-25, The Revenue and Gross Profit Rate of Xinyangfeng, 2014-2017

2014 2015 2016 2017

Revenue(RMB 000 Million) 83.52 96.19 82.76 91.78

Gross Profit Rate 18.57% 18.77% 16.13% -


12.2 Investment Projects in Fertilizer Industry in 2017

12.2.1 Investment Direction

In the aspect of fertilizer varieties, influenced by capacity reduction and high pressure from



environment departments, traditional fertilizer capacity was obviously cut down and there

were less capacity built newly and planned to build, however more compound fertilizer and

new-type fertilizer projects were built and planned to build, becoming popular investment

spots in 2017. Besides, Kingenta also made efforts to set up comprehensive service

platforms and create the whole industrial chain involving in agriculture.

12.2.2 Investment Area

The investment in new-type fertilizer industry mainly focuses on main agricultural production

areas such as Henan, Shandong, Jilin, Hebei, Guangxi and Yunnan.

12.2.3 Investment Enterprise

Traditional large fertilizer companies such as Noverfun, Kingenta, Harlir and Xinlianxin are

actively building new-type fertilizer projects, and more and more new investors are entering

this field. New-type fertilizers most are bio-organic fertilizer, slow/controlled release fertilizer,

humic acid water soluble fertilizer, etc., with relatively high requirement on techniques.



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Related Reports

China Fertilizer Market Research Weekly Report

China Fertilizer Industry Analysis & Forecast Monthly Report

China Fertilizer Market Review & Outlook

China Nitrogen Fertilizer Industry Atlas

China Phosphate Fertilizer Industry Atlas

China Potash Fertilizer Industry Atlas

China Compound Fertilizer Industry Atlas

Competitiveness Analysis and Assessment for China Key Compound

Fertilizer Enterprises

Research Report on Water Soluble Fertilizer Market in China

Research Report on Slow and Controlled Release Fertilizers Application and

Industry Development in China

Analysis Report on Fertilizer Demand in China

Report on Development Status Quo and Investment Value of China’s New

Fertilizer Industry

Yearbook on China's Agricultural Products (2015) Special Survey Service

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