China BlueChemical (BlueChem) is seeking opportunities to build nitrogenous fertiliser plants and acquire potassium fertiliser resources overseas as part of its strategy to expand its product line and internationalise its operations. The unit of offshore oil and gas producer China National Offshore Oil Corp wants to invest in urea plants abroad because the domestic market for the nitrogenous fertiliser is oversupplied and the price of its main raw material, natural gas, is getting more expensive, chief executive Yang Yexin (right) said. 'The Middle East has a lot of cheap gas,' he said. 'We also need to grow our operation's scale and globalise it ... If you look at renowned fertiliser firms like [Norway's] Yara, they all have operations worldwide.' Beijing has encouraged state firms to expand and invest abroad so that they can become internationally competitive, and also to secure resources for the booming economy. For years, China BlueChem has been scouring the world for potash, to break into the market. The mainland has to import 70 per cent of its needs for the potassium fertiliser. Mr Yang said it was difficult to make potash investments, as the resources are concentrated in a few countries, but added: 'Still, deals have been done, and not cheap, too.' Rival Sinofert Holdings also wants to take advantage of the sharp plunge in valuation of international fertiliser firms and has been in talks to acquire potash assets in Central Asia. China BlueChem and partner Shanxi Hualu plan to spend up to 5 billion yuan (HK$5.67 billion) in the next five years to build a urea plant in Shanxi province with an annual output capacity of 1.04 million tonnes. Half of the capacity is scheduled to come on stream by early 2012. The 51 per cent-held project will significantly boost China BlueChem's output, which was 941,000 tonnes in the first half. The firm recently paid 637 million yuan for a 49 per cent stake in a coal mine, the output of which will be feedstock for the urea plant, about 20 kilometres away. BlueChem posted on Wednesday a 50.2 per cent year-on-year drop in net profit to 527.02 million yuan for the first half. Sales fell 22.2 per cent to 2.83 billion yuan on a 51.6 per cent plunge in the price of methanol.