Fertiliser supplier will increase imports and spend billions to acquire plants from its parent company
Sinochem Hong Kong Holdings aims to increase sales volume by almost 80 per cent and double its outlets in three years as it taps growth opportunities offered by the government's policies to raise demand and output of agricultural products.
China's largest fertiliser supplier will realise the plan by increasing imports and spending billions in the next three years to acquire fertiliser plants from parent Sinochem Corp and building one plant itself.
Chairman Liu Deshu said yesterday that Sinochem Hong Kong was in talks with the central government to co-operate on improving efficiency of the country's agricultural logistics operations, a move that would drive up demand for farm produce and fertilisers.
The Ministry of Commerce has proposed in its 2006-10 development plan to subsidise the initiative, as part of the government's policies to raise farmers' income and domestic demand.
'The government is working on creating a common market like that in Europe ... but the work has only just begun and local protectionism has not been resolved,' Mr Liu said.
To complement the initiative, Sinochem Hong Kong aims to double its mainland sales points to 2,000 by 2008 from 1,063 last year, at an investment of 40,000 to 60,000 yuan each. This would see the company cover all 1,800 counties. Assuming it cost 50,000 yuan to set up one sales point, the company would need to spend 46.85 million yuan to realise the plan.