The world's biggest fertilizer enterprise, Canada-based Potash Corp of Saskatchewan Inc, yesterday completed an additional 10.01 per cent purchase of Sinochem Hong Kong Holdings Ltd for US$126 million.

The acquisition boosted PotashCorp's holding in Sinochem Hong Kong, the Chinese fertilizer giant known as Sinofert, to 20 per cent.

PotashCorp in June last year purchased 9.99 per cent of Sinofert.

The 10.01 per cent takeover finalized yesterday gives the Canadian firm the right to nominate a second member of Sinofert's board of directors.

"This is a significant investment that will have an immediate positive impact on our company and, more importantly, will provide significant growth potential for us over the long term," Bill Doyle, PotashCorp president, said in a statement.

China is one of the world's most fertile agricultural markets, as the government has introduced a number of preferential policies to boost the buying power of farmers, who account for more than 60 per cent of the nation's population.

The country's fertilizer production increased by as much as 13 per cent in 2004, compared with the annual increase of more than 5 per cent before that year.

Output of the agricultural product is expected to grow by 16 per cent to reach 52.5 million tons, industry figures said.

PotashCorp's Doyle said owning 20 per cent of Sinofert would gain his company "a new generation of opportunities," through the sales of its products to the key customers in China, and the distribution of all Sinofert products throughout China.

Industry analysts said the buyout move paved the way for future partnership between the two companies, which would facilitate PotashCorp's ambitious plan to increase presence in the growing Chinese market.

PotashCorp is the world's largest fertilizer enterprise by capacity, producing the three primary plant nutrients potash, phosphate and nitrogen. It is the world's largest potash company, with 23 per cent of the world's overall capacity and 86 per cent of the world's unused capacity.

Its products are used by fertilizer, feed and industrial customers on six continents. PotashCorp has corporate offices in Saskatoon, Saskatchewan, and Northbrook, Illinois.

Employing approximately 5,000 people, PotashCorp is a publicly traded Canadian corporation with all shares listed and traded on the Toronto and New York stock exchanges.

Sinofert is a leading fertilizer enterprise in China. On December last year, it released its 9-month earnings of US$76 million, 51 per cent higher than the same period in 2004.

One of the largest importers of fertilizer products in China in terms of import volume, it is the largest distributor of these products and is also a major producer of phosphate-based fertilizer products.

At the end of November 2005, it had 14 branch offices and 1,036 sales centres as part of an extensive distribution network that provided products to 76 per cent of total sown lands in China.

Shares of Hong Kong-listed Sinofert yesterday increased by 3.4 per cent to HK$2.275 (29 US cents) on the Hong Kong Stock Exchange.

Source: China Daily