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.'