Our Industry

Demand Drivers

• China’s increasing population (estimated to reach 1.6 billion by 2015) means more mouths to feed each year
   
• Increased urbanization and loss of land due to desertification means less available land on which to grow crops (China’s “red line” for agricultural land of 120 million hectares is already at risk)
   
• As China becomes more affluent, diets change to more meat and poultry which requires more production of corn, wheat and barley and higher production of vegetables and fruits
   
• With less land, production per hectare must increase and nutrients taken from the soil must be replaced to ensure sustainable crop production.
   
• Food self sufficiency is a key Chinese government policy

Fertilizers in China

• China is the largest fertilizer market in the world
• 60 million tonnes consumed annually
• Growing at 2-3% each year

• Balance of Fertilizer Supply/Demand (2010)
• China remains self sufficient in the production of nitrogen and phosphorous, although the domestic supply of phosphorous rock, which is a non renewable resource, is declining
• China is reliant on imports for potash (7 million tonnes each year)
• In addition, China imports approximately 1.3 million tonnes of NPK’s and 12 million tonnes of sulphur. Sulphur is a critical element for the production of phosphate fertilizers

• Phosphorous fertilizer consumption in China is higher than anywhere else in the world
• Represents over 30% of world demand
• Annual consumption of approximately 12 million tonnes of P₂O₅:

• Fertilizer markets in China are typified by too many small players lacking economies of scale and focusing on provincial areas
  • 400 companies mine 55 million tonnes of P rock in China versus 6 companies in the USA
  • 130 companies produce phosphoric acid
  • 4,350 companies produce NPK’s
  • Sulphur and potash must be imported to produce NPK’s
  • Chinese authorities intend to consolidate industry and create world-scale companies.