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China, Kazakhstan to jointly build fertilizer production hub

Xinhua | Updated: 2016-08-29 15:32

CHONGQING - A Chinese firm and a Kazakhstan firm have agreed to form a joint venture to develop a major fertilizer production and distribution hub in southwest China's Chongqing municipality.

Under the deal between Kazakhstan Potash Corporation (KPC) and Chongqing Agricultural Production Material Group, the two sides will jointly build a major potash fertilizer distribution center and the largest compound fertilizer producer in western China, with an annual turnover of around 3 million tonnes.

The fertilizer products will be sold in southwest China and exported to Japan and Southeast Asian countries, said Wan Zhongcheng, chairman of Chongqing Agricultural Production Material Group.

The cooperation is seen as a practical move aligning with China's Belt and Road Initiative, which aims to build a trade and infrastructure network connecting Asia with Europe and Africa, along ancient trade routes.

As part of the deal, potash from Kazakhstan will enter Chongqing through the Chongqing-Europe railway system, passing through northwest China's Xinjiang Uygur Autonomous Region, which will greatly cut transport costs, Wan said.

The two firms will also set up a joint venture and develop a comprehensive logistics base that integrates road, waterway and rail transport in Jiangjin District, Chongqing, a city on the Yangtze River, China's longest waterway.

The joint venture aims to realize an annual revenue of more than 20 billion yuan (about $3 billion) in three to five years, with a profit of 200 million yuan. The venture plans to list on an overseas stock market.

KPC, listed in Australia, is a mineral exploration company which owns the rights to three large potash deposits in Kazakhstan. The Chongqing agricultural firm is one of the largest of its kind and a key fertilizer supplier in China.

China needs about 14 million tonnes of potassium chloride per year, about half of which is imported.

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