All Posts from July 14, 2016

K+S to acquire Chinese fertilizer producer

K+S said it is acquiring the activities of Huludao Magpower Fertilizers Co. Ltd. (Magpower), a Chinese producer of magnesium sulfate fertilizers, marking an important step forward for the German company in expanding into Asia. K+S put the transaction value at “a euro amount in the low double-digit millions range.”

“In line with our management agenda, we are bolstering our competitive position in the specialties area by means of this acquisition and can therefore better tap into the growth markets of Southeast Asia,” said Norbert Steiner, K+S Aktiengesellschaft chairman, and responsible for the Potash and Magnesium Products business unit. “We see great sales potential for magnesium sulfate products to the agricultural sectors in China and Southeast Asia which we can’t service adequately from our German sites.”

Magpower is one of the largest Chinese producers of synthetic magnesium sulfate (SMS), which is used as a fertilizer for oil palms, soybeans and sugar cane as well as for industrial applications.

K+S is acquiring a 90,000 mt/y production site in Huludao City in China’s northeast Liaoning province, where capacity could be doubled to 180,000 mt/y in the foreseeable future.  The site currently employs about 50 people.

To date, K+S has only produced magnesium sulfate fertilizers (including ESTA® Kieserite) from natural deposits at several German sites in Hesse and Lower Saxony. It said the products produced in Huludao will complement the K+S product range through the addition of highly effective, water soluble magnesium sulfate.

The transaction is anticipated to close at the end of this year.

BPC and China agree on K contract

Belarusian Potash Co. (BPC) today announced it had reached an agreement with the Consortium of Chinese buyers (Sinochem, CNAMPGC, and CNOOC) to set the contract price of $219/mt CFR to supply potash to China. The price is effective until Dec 31, 2016.

On the volumes agreed, BPC said only that the contract commitments will be in line with the provisions of the long-terms MOUs the parties signed earlier.

“The deal with China logically arises from the contract with India being previously entered into, and we are confident that the Chinese deal will contribute to stabilizing the global potash market and secure its upward advance. This price level reflects the actual market situation and the trends prevailing in the global potash market,” said Elena Kudryavets, BPC Director General.

She believes the deal will enable a balanced demand and supply in the market, support business momentum, and create a solid basis for global potash producers and buyers, assisting them in identifying future business strategies.