Fertilizer industry goes abroad to find opportunities

The Ministry of Finance announced on April 17 that with the approval of the State Council, the Customs Tariff Commission of the State Council has decided that all chemical fertilizers and some chemical fertilizers exported to all trade forms, regions, and enterprises within the domestic fertilizer season from April 20 to September 30 this year. Raw materials will be subject to a special export tariff of 100% on the basis of the existing export tax rate. After this special export tariff is added, China's fertilizer export tax rate will increase from 100% to 135%.
After the introduction of this policy, many people in the fertilizer industry felt very pessimistic that the export gate was completely blocked and the days of fertilizer companies were even more saddened. However, relevant people in the industry have seen a new opportunity from this policy, which is to build fertilizer plants directly abroad.
In recent years, due to the rise in international energy prices, the significant increase in fertilizer production costs, and the impact of rising international grain prices and demand, international fertilizer prices have risen sharply, and China’s fertilizer exports have also increased substantially. In the first two months of this year, the export of urea was 1.71 million tons, an increase of 250% over the same period of last year. Monoammonium phosphate and diammonium phosphate were exported at 259,000 tons and 315,000 tons, respectively, an increase of 280% and 130% year-on-year respectively. The state has adopted strict restrictions on fertilizer exports from the perspective of safeguarding domestic supply of chemical fertilizers and controlling energy exports (fertilizer is a high-energy-consuming product). This time, the measure of adding 100% special tariffs is a heavy blow. If we say that the previous fertilizer exports still left a "sew", it is now also blocked the "sew". The country’s intentions are very clear and it will not allow fertilizer exports during the peak season. In this regard, chemical fertilizer companies should give full understanding of the country’s overall interests.
On the Other hand, we must also realize that through the large number of exports and market development in recent years, the status of our products in the international fertilizer market is rapidly increasing. We have a wide market base and strong competitiveness, and have a good reputation. And influence. It would be a pity if the international market was lost simply because China strictly restricted exports. Experts in the industry suggest that in this case, the better choice is to set up factories directly to foreign countries, make use of foreign natural gas, coal, and phospho-potash resources for production, and then use huge foreign market resources for sales to earn production. The profits of the links and sales links are very good for reducing China’s energy consumption, occupying the international market more effectively, and obtaining greater economic benefits. At the same time, this approach is also very feasible. China is the world’s largest producer of chemical fertilizers and the country with the largest number of fertilizers. Take urea as an example. Gas heads, coal heads, and oil heads are all available in our country. Nitrogen, phosphorus, potassium, and compound fertilizers are all More mature and more advanced, set up factories in foreign countries with strong strength.
In recent years, some of our country's fertilizer production companies and distribution companies have been at the forefront, go abroad, and set up factories directly in foreign countries. The specific methods include sole proprietorships, joint ventures with local companies, and shareholding cooperation. However, on the whole, the scale is small and the development speed is relatively slow. At present, the state levies high export tariffs on chemical fertilizers to provide opportunities for foreign companies to set up factories. Those with far-sighted and visionary enterprises will seize this opportunity to boldly go out of the country and set off a climax for managing fertilizer companies abroad.

ASAHI FYH Bearing

Ruihode Bearing Co., Ltd. , http://www.sdrollerbearing.com