Lutianhua Heading for Global First-Rate Chemical Fertilizer Enterprise

Lutianhua Co., Ltd. located in the southeast of Sichuan province is the largest chemical fertilizer producer in China today. It has strong competitiveness in the domestic chemical fertilizer market. In the past two years the company had gained an annual growth rate of over 50%.     While consolidating its main business - chemical fertilizer production, the company is actively developing its second main business - chemical production and heading for a chemical fertilizer and chemical enterprise with the first-rate competitive edge in the world.

Pioneer in the chemical fertilizer sector

Lutianhua Co., Ltd. has two unique advantages in chemical fertilizer production. One is the advantage in capacity and technology. Through the technical renovation intended for output increase and energy conservation, the capacity in the company expanded rapidly. Lutianhua Co., Ltd. already owns a capacity of 1.0 million t/a ammonia and 1.6 million t/a urea today. Besides expanding the capacity, the technical renovation has effectively reduced the production cost such as energy consumption. Production units in the company are at the world advanced level and feature high output and low cost. Products in the company have maintained strong competitiveness in the market and their market share is making a stable increase. The other is the advantage in marketing network. Chemical fertilizers are means of agricultural production. Lutianhua Co., Ltd. started to adopt positive measures and conduct innovation to its product marketing system years ago. A complete marketing network owned by the company itself has been formed and good results have been produced.     Major chemical fertilizer products in Lutianhua Co., Ltd. today are nitrogenous fertilizers. Focus for the future development of the chemical fertilizer production is laid on compound fertilizers. While maintaining the advantage in nitrogenous fertilizers, the company will gradually increase the proportion of phosphate fertilizers and potash fertilizers and extend the product chain. The concept developed by the company is to exercise control on resources for phosphate fertilizers and potash fertilizers, guarantee the supply of resources for products and form the market competitive edge of products.     The demand growth of chemical fertilizers in China will be around 2% as projected by international organizations and 1.7 - 2% as projected by China itself. The output of chemical fertilizers has to maintain a considerable growth. The Chinese Government has paid great attention to agriculture and issued many policies to ensure the stable growth of agriculture and promote the consumption of chemical fertilizers. Due to changes of resource structure and more stringent requirements on environment, the chemical fertilizer sector will be faced with fierce competition. Enterprises that are close to resources, own advanced technology and have low energy consumption and large production scale will have remarkable advantages. China will support and promote the readjustment to the production distribution of basic fertilizers and shift the production of basic fertilizers to areas with an advantage in resources. Efforts will be made to establish 20 large enterprise groups and let them control 50% of the total chemical fertilizer output in 2010 and form some large enterprise groups with influence in the international market. Such policy is extremely favorable to the development of Lutianhua Co., Ltd.

New growth point of chemical products

The strategy for the future development of Lutianhua Co., Ltd. is that while consolidating the main business - chemical fertilizer production, the natural gas chemical sector and the coal chemical sector will be actively developed and the products chain of methanol, 1,4-butanediol chemical products and grease chemical products will be extended to develop its second main business chemical production through products readjustment, capital operation, project investment and marketing expansion.    Lutianhua Co., Ltd. has already made investments on several chemical projects. A 400 000 t/a methanol project started construction in April 2004 and already produced qualified product on December 11th, 2005. A 100 000 t/a dimethyl ether unit based on methanol, the largest in the world today, is at the stage of installation and will start production in the first quarter of 2006. The successful completion of the project has created 7 records in the construction of chemical projects. Effective control on investment, quality, progress, safety and cost is exercised and the first large single-series methanol production line in China is constructed. The dimethyl ether production line has the largest scale in the world. The innovative integration of automatic control technology holds a leading position in the chemical sector. The investment of the project is the lowest in similar 400 000 t/a methanol units. The labor productivity (labor being controlled at the minimum level) is the highest. There is a strong sense of environmental protection and a noise-proofing wall is put up between the production area and residents' living quarters, the first time for industrial enterprises to help build a harmonious society. The construction period is short. A coal-power co-production unit intended to stabilize the chemical production was completed in November 2004. The first 1,4-butanediol unit in China using the technology from Du Pont has a design capacity of 25 000 t/a and the maximum capacity of 28 000 t/a. The project is at the stage of wet commissioning today and will produce qualified product in the first quarter of 2006.