During the period 2003 to 2005, international fertilizer market witnessed a full recovery. Meanwhile, China's fertilizer prices increased and the profitability of China's fertilizer industry improved significantly, resulting in rapid expansion of production capacity and increasingly severe competition in the industry. China's newly-added production capacity hit four million tons in 2006, when it was already clear that China was under pressure of oversupply of urea. In 2007, China added another five million tons of urea to its total production capacity. In 2008-2010, China's newly-added production capacity of urea is expected to reach 11.1 million tons, based on planned projects and projects under construction.
In addition, China's fertilizer market will confront a competition from foreign-invested companies. According to Chinese government commitments in entry into the World Trade Organization, starting from December 11, 2006, China began fully opening its wholesale and retail market of fertilizer industry, and influx of foreign capital has intensified the market competition in the industry.
China produces about 260 varieties of pesticides. The product structure has improved greatly. But highly-poisonous pesticides still amount to the majority. Currently, among the three main categories of pesticides in China, output ratio of insecticide, herbicide and bactericide is about 60:30:10, which still lags far behind the reasonable ratio of 30:50:20 in the developed countries.
This report makes an in-depth study on all investment projects of 32 listed companies in China's fertilizer and pesticide industry from 2000 to 2008 and also makes summary of investment trends of China's fertilizer and pesticide industry as well as investment features and investment trends of the listed companies.
Project Investment of China Listed Fertilizer & Pesticide Companies, 2000-2008H1
From 2000 to 2008, total investment of China's listed fertilizer and pesticide companies has been rising steadily. The investment value jumped to CNY12.81 billion in 2007 from CNY1.453 billion in 2000, among which, the biggest proportion went to Southwest China, accounting for 38.56% of the total, followed by East China, North China and Central China with a share of 29.04%, 10.4% and 9.55% respectively.
Investment Distribution of China Fertilizer and Pesticide Industry (by Region), 2000-2008
This report makes an in-depth analysis on all investment projects financed by 32 listed companies in China's fertilizer and pesticide industry. For example, Sichuan Lutianhua Co., Ltd. (000912) is referred in this report.
Investment Trend of Sichuan Lutianhua Co., Ltd., 2000-2008H1
Investment Features of Sichuan Lutianhua Co., Ltd:
Main Business: production and sales of fertilizer and chemical materials; diversification direction: natural gas chemical industry and coal chemical industry.
The company's main products include urea, compound fertilizer, nitric acid, ammonium nitrate and 1,4-butanediol. Its annual production capacity of synthetic ammonia and urea reaches one million tons and 1.6 million tons respectively. It is the largest urea manufacturer in China. In the future, the company will endeavor to exploit natural gas chemical, coal chemical and phosphorus chemical field and develop methanol, 1,4-butanediol and their downstream products.
Meanwhile, the company also plans to penetrate northwestern market as part of its national layout, so as to strengthen its leading status in urea manufacturing.
Investment Distribution of Sichuan Lutianhua (by Segment), 2000-2008
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