APC widens penetration into Chinese market
Jordanian potash continues to gain greater acceptance in the Chinese market, as larger quantities head to the Far Eastern destination.
The Arab Potash Company (APC) on Thursday signed an agreement whereby it will supply the Chinese firm, Sinochem Company, 400,000 tones of the natural resource next year.
The deal will bring in $42 million to the APC, adding more to its growing profits.
“The package means that we have guaranteed part of our sales next year,” said Issa Ayyoub, APC director general.
According to a press release, Sinochem is one of the largest companies for importing and distributing chemical fertilizers into the Chinese market, with an annual turnover of $20 billion.
According to Ayyoub, the Chinese market will absorb 350,000 tones of Jordanian potash by the end of this year; totaling five per cent of market share.
With the agreement, a further boost is expected.
“In 2001, our potash will comprise 7 percent of the total Chinese imports of the natural resource, estimated at 4.5 million tones,” added Ayyoub on the sidelines of concluding the agreement.
China is the third largest importer of chemical fertilizers worldwide.
“The APC is trying to expand its Far Eastern outlets in order to cope with the rise in production,” he explained.
This year, the company has boosted its production by 15 per cent, with production expected to reach 1.85 million tones by Dec. 31 of this year. By 2005, it plans to produce 2.8 million tones.
By the end of 2000, Chinese imports from the Kingdom's potash will register an increase of 22 per cent. Last year, imports stood at 285,000 tones.
“The quality of the APC's potash is accepted by the Chinese end users,” said Chunhua Guo, director of the international marketing section at one of Sinochem companies.
The APC-Sinochem's trade relationship dates back to 1983. During the first six months of 2000, the APC, a public shareholding company, registered a JD19.3 million in profits compared to a slightly below JD17 million during the same period of last year.
Ayyoub said the company predicts profits to reach JD42 million by the end of this year, JD5 million over last year's.
Ayyoub attributed the rise in both production and revenues to an increase in efficiency, and more restrained expenditure. He also referred to preventive maintenance as a major reason, explaining that maintenance led to less shut-downs at the production facilities.
China is the second largest importer of the Jordanian potash following the Indian market which absorbs 500,000 tones a year.
The APC is the 5th largest potash producer in the world, with a current world market share of 4.4 percent.
The company where the government is the major stake owner maintains a concession agreement which gives it an exclusive right to produce and exploit the Dead Sea resources until 2058.
Other shareholders include the Iraqi government, the Arab Mining Company and other Arab governments.
( Jordan Times )
By Rana Awwad
© 2000 Mena Report (www.menareport.com)