In early March 2016,
at the 2016 China National Controlled Release Fertilizer Promotion Meeting that
was held in Shandong Province, the Chinese government vowed to continue to
promote controlled release fertilizers. As a leading company in the industry, Kingenta will be given preference in resources distribution and support, and its
performance is expected to continue to increase.
On
1 March, 2016, the National Agro-tech Extension & Service Center (NATESC)
of the Ministry of Agriculture of the People's Republic of China and the
National Engineering Technology Research Center for Controlled Release
Fertilizer jointly held a 2016 China National Controlled Release Fertilizer
Promotion Meeting in Linshu County, Linyi City, Shandong Province.
In the meeting the NATESC emphasized that, in response to the No.1 Central Document and the initiative
of achieving zero growth in chemical fertilizer consumption by 2020, China
should strongly promote soil testing and formulated fertilization, enhance the
development of new fertilizers and optimize the existing fertilizer product
structure. Controlled release fertilizers are representative of new
fertilizers, so hastening its adoption will play a pivotal role in reducing the
consumption volume of chemical fertilizers and improving the utilization rate
of fertilizers.
Relevant data show that controlled release fertilizers can significantly
increase corn yield. Farmers can have an average yield increase of 16.2% and an
income increase of USD28.68 (RMB187.50) per mu (15 mu = 1 ha) when using
controlled release fertilizers instead of traditional ones.
According to CCM's research, the average annual growth rate in the capacity of
controlled release fertilizer has surpassed 45% in China, and both the
production and consumption of Chinese controlled release fertilizers have
accounted for about 50% of the global total in recent years. In 2015, China
promoted controlled release fertilizers in 25 provinces and built 83 testing
and demonstration pilot projects.
China
is vigorously promoting controlled release fertilizers. Given the circumstances,
CCM believes that Kingenta Ecological Engineering Group Co., Ltd. (Kingenta),
as a leading company in the industry, will be given preference in resources
distribution and support, and its performance is expected to continue to
increase.
According to a bulletin released by Kingenta at the end of Feb. 2016, the
company performed well in 2015:
-
Total
revenue: USD2.71 billion (RMB17.74 billion), up by 30.89% year on year
-
Net
profit: USD169.76 million (RMB1.11 billion), up by 28.24% year on year
Such an outstanding performance can be attributed to Kingenta's vigorous
exploration of the O2O business pattern in selling agricultural means of
production. This ensured the stable growth of common compound fertilizer sales
and nitro-compound fertilizers sales and boosted the sales volume of new
fertilizers, such as controlled release fertilizers and water-soluble
fertilizers.
Currently, Kingenta's capacity of controlled release fertilizers has reached
1.70 million t/a. Its cooperation with the NATESC has extended to over 20
provinces and cities around the country with a controlled release fertilizer
application area of over 13.33 million ha (200 million mu), essentially
covering all the major production areas of field crops and industrial crops in
the country and saving an accumulated production cost of USD11.32 billion
(RMB74 billion).
For this, Wan Lianbu, president of Kingenta, disclosed that the company will
continue to cooperate with the NATESC and further promote controlled release
fertilizers in order to benefit more farmers and contribute more to the
improvement and transformation of China's chemical fertilizer industry, and
also to achieve the goal of zero growth in the consumption of chemical
fertilizers and to develop green ecological agriculture. Meanwhile, it will
also accelerate its international development strategy so as to improve China's
controlled release fertilizers' influence on the international market.
According
to CCM's research, since Jan. 2016, Kingenta has already put forward a series
of controlled release fertilizers-related projects, which mainly include:
1. The establishment of Hubei Wolfertile Ecological Engineering Co., Ltd.
(Hubei Wolfertile) and construction of a 800,000 t/a new fertilizer project
With a total investment of USD15.29 million (RMB100 million), Hubei Wolfertile
was jointly built by Kingenta and its wholly-owned subsidiary Wolfertile
Compound Fertilizer Co., Ltd. as well as Hubei Qianjiang Jinhuarun Fertilizer
Co., Ltd. (Hubei Jinhuarun). In particular, Kingenta and its wholly-owned
subsidiary hold 75% of shares in the new company between them.
Through this cooperation, Kingenta can take advantage of Hubei Jinhuarun's
existing synthesis ammonia production equipment to provide raw materials for
its new fertilizer project which will help the company to reduce reliance on
external raw materials and cut production costs.
2. Additional USD70 million investment in Kingenta (Hongkong) Investment Co.,
Ltd. (Kingenta (Hongkong))
On one hand, this will help Kingenta to further explore the international
market by consolidating and improving product recognition and brand influence
in foreign markets; on the other hand, this will help Kingenta to merge with
and acquire foreign companies in the new fertilizer and agricultural service
industries who could benefit the enrichment of its products.
3. The acquisition of core assets (production equipment, office facilities,
brands, patents, inventories, etc.) of Ekompany Agro B.V. (Ekompany) through
Kingenta (Hongkong) at EUR6.10 million
Founded in 2010, Ekompany is the biggest coated controlled release fertilizer
company in Europe, with a capacity of 40,000 t/a, accounting for 45% of the total
for the whole of Europe. It also has a bulk blend fertilizer production line
(60,000 t/a).
This acquisition not only provides Kingenta ownership of patents, but also
helps Kingenta to open sales channels for its controlled release fertilizers in
the European market, further increasing its competitiveness in the
international market.
About CCM:
CCM is the leading market intelligence provider for China's agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.
For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.
Tag: Kingenta, fertilizer