Report on the Economic Evaluation of the Chemical Fertilizer
Manufacturing Sector in China in 2006

By CPCIA


  1  Overall evaluation of the chemical fertilizer
manufacturing sector in China in 2006

The chemical fertilizer manufacturing sector in China enjoyed
a sustained rapid development in 2006. According to the analysis
of data provided by the National Bureau of Statistics, there were
1 896 enterprises with a considerable scale (all state-owned
enterprises and also non state-owned enterprises with a sales
revenue of over RMB5.0 million in 2005) and the total employment
was 716 300 persons, an increase of 1.50% over the previous year.
Pushed by the brisk domestic demand, the chemical fertilizer
manufacturing sector achieved a considerable progress in 2005.
The growth was slowed down in 2006. The index with the highest
growth was the asset value. The asset value of the sector was
RMB360.725 billion in 2006, an increase of 26.32% over the
previous year. The industrial total production value was
RMB286.988 billion, an increase of 17.53%; The sales revenue was
RMB277.494 billion, an increase of 22.34% and the total profit
was RMB18.315 billion, an increase of 4.06%.


  2   Economic evaluation of top 100 enterprises in 2006

(1) Main economic indexes

The total asset value of top 100 enterprises in the sector was
RMB234.272 billion in 2006, an increase of 21.67% over the top
100 in 2005. The sales revenue was RMB149.638 billion, an
increase of 18.51%. The industrial total production value was
RMB148.587 billion, an increase of 15.12%. The total profit was
RMB13.554 billion, an increase of 5.09%
   All main economic indexes in top 100 enterprises held
extremely high proportions in the entire chemical fertilizer
manufacturing sector. The asset accounted for 64.94%; The sales
revenue accounted for 53.92%; The industrial total production
value accounted for 51.77%; The profit accounted for 74.01%. It
can therefore be seen that the top 100 enterprises holds a very
significant position in the development of the entire sector.

(2) Scale analysis

Among top 100 enterprises, medium and large scale enterprises
held a dominant position. The sales revenue of large enterprises
was RMB106.830 billion in 2006, accounting for 71% of the total
sector; The sales revenue of medium scale enterprises was
RMB39.816 billion, accounting for 27%; The sales revenue of
small scale enterprises was RMB2.991 billion, accounting for 2%
only.

(3) Regional distribution

The regional distribution of top 100 enterprises was rather
concentrated. The sales revenue in top 5 provinces accounted for
55.34% in the entire chemical fertilizer manufacturing sector.
Shandong province held the first place and the sales revenue
accounted for 20.78%; Jiangsu province held the second plant and
the sales revenue accounted for 10.19%.

(4) Ownership analysis

In top 100 enterprises, proportions held by enterprises with
various economic types are widely different. State-owned and
state-controlled enterprises held the first place and their
sales revenue was RMB96.865 billion, accounting for 64.73%;
Collective enterprises held the second place and their sales
revenue was RMB40.285 billion, accounting for 26.92%; Private
enterprises held the third place and their sales revenue was
RMB8.129 billion, accounting for 5.43%; The sales revenue of
foreign-funded enterprises accounted for 2.91%.

(5) Performance evaluation

The rate of profit/sales in the entire chemical fertilizer
manufacturing sector was 6.60% in 2006 and the rate in top 100
enterprises was 9.06%; The rate of profit/asset in the entire
sector was 5.08% and the rate in top 100 enterprises was 5.79%;
The per-capita profit created in the entire sector was RMB25 100
and the per-capita profit created in top 100 enterprises was
RMB48 100. It shows that top 100 enterprises held an extremely
high proportion in scale, asset value and profit.


  3  Comprehensive evaluation

Agriculture is the basis of the national economy in China.
Chemical fertilizers play a decisive role in stabilizing a
sustained growth of agriculture. According to the estimates made
by the FAO, 55% of the grain growth in developing countries
attributes to the action of chemical fertilizers. With the
population growth in China and in the world, the demand for grain
will go further up and chemical fertilizers will still hold a
dominant position in agriculture. The overall stable
development of the chemical fertilizer manufacturing sector in
2006 greatly promoted the growth of the national economy and the
stability of people's life.
    The Chinese Government offered greater support to
agriculture in 2006, both the production and the sales were brisk
in the agricultural means market and the price kept stable. The
average market price of urea was RMB1 795 per ton, a drop of 2.4%
from 2005; The market price of ammonium bicarbonate was RMB536
per ton, a rise of 2.7%; The average market price of MAP was RMB1
908 per ton, a drop of 9.3%; The market price of DAP (domestic
product) was RMB2 549 per ton, a drop of 1.0%.
   The export amount of chemical fertilizers (physical goods)
in China was 5.452 million tons in 2006, an increase of 16.2%
over the previous year. Of the total the export amount of
nitrogenous fertilizers dropped 4.0% and the export amount of
phosphate fertilizers increased 2.3%. With the macro control on
export tariff exercised by the government, the export amount of
urea in particular was only 1.3673 million tons in 2006, a drop
of 9.7% from the previous year.