On 2 November, Sinofert signed a joint venture agreement with Gansu Wengfu Chemical Co., Ltd.'s (Gansu Wengfu) shareholders Guizhou Hongfu Industrial Development Co., Ltd (Guizhou Hongfu) and Gansu Jinchang Chemical Industrial (Group ) Co. Ltd. (Gansu Jinchang) in Jinchang, Gansu province. Sinochem Fertilizer agreed to subscribe for 30% of the equity interest in Gansu Wenfu, who is largest phosphate fertilizer producer in northwestern China. After this registered capital increase and share expansion, Sinochem Fertilizer, Guizhou Hongfu and Gansu Jinchang's share interests in Gansu Wengfu are 30%, 40% and 30% respectively. Mr. Du Ke Ping, General Manager of Sinochem Fertilizer, Mr. He Hao Ming, Chairman of Guizhou Hongfu, Mr. Hao Huai Min, Chairman of Gansu Jinchang, Secretary of Chinese Communist Party (CCP) and Vice Mayor of Jinchang City Gao Dong Sheng attended the agreement signing ceremony.
Gansu Wengfu is the only trinity (phosphate rock, acid and fertilizer) phosphate fertilizer enterprise in Gansu Province, with 800,000 tons of annual phosphate rock processing capacity, and 180,000 tons of DAP production capacity. In June, Gansu Wengfu made investment in second stage project of constructing 100,000 tons of annual phosphate acid and 240,000 tons of DAP production capacity. After completion of the project, the company will have 420,000 tons of DAP annual production capacity, becoming the largest phosphate fertilizer producer in northwestern China.
Guizhou Wengfu is one of the largest phosphate and NPK fertilizer producers in China, with advantage of phosphate rock resources, technique and production management. Guizhou Hongfu made important success of gaining phosphate chemical industry technique in recent years. Jinchang is the largest nickel production base in China, inorganic chemical production base in northwestern China and important cereal and edible oil production base in Gansu province. As Gansu’s backbone enterprise and top hundred chemical companies in China, Gansu Jinchang has its advantage of unique location and raw material of phosphoric acid from nickel smelting. [PAGE]
Mr. Du Ke Ping said at the signing ceremony that Northwest is one of the important agricultural areas in China. Through strategic investment in Gansu Wengfu, Sinochem Fertilizer hopes to establish cooperation with Guizhou Hongfu and Gansu Jinchang, make full advantage of each party, to construct the largest phosphate fertilizer project in Northwestern China. Mr. Du said, the joint venture establishment will be helpful to convert local resource advantage to economic advantage, making greater contribution to agricultural production.
Sinochem Fertilizer's strategic investment in Gansu Wengfu is an important measure of Sinochem Group to participate in Northwest Development Plan of China, also an important strategic activity of Sinochem Fertilizer after making equity investment in Luxi Chemical Co. Ltd. and Hualu Hengsheng Chemical Co. Ltd. in 2006 and Henan Xinlianxin Fertilizer Co. Ltd in 2007. The latest investment is helpful to further enhance Sinochem Fertilizer's product supply chain and strategic alliance, and to push the company's distribution network development in Northwest China.