Sinofert Fertilizer Company, a subsidiary of Sinofert Holdings, has entered into an agreement to purchase Xundian Lomon Phosphorus Chemical, based in Yunnan province, China for 1.38bn yuan ($2.18bn) to build reserves.
Under an equity transfer contract, Sinofert Fertilizer will buy Xundian Lomon from Tibet Longsheng Investment Management and Sichuan Lomon.
Xundian Lomon Phosphorus Chemical will become the subsidiary of Sinofert Holdings on the completion of the equity transfer.
The acquisition will allow Sinofert to upgrade the value chain of its phosphorite chemical business.
Sinofert Holdings said it will use self-owned capital and bank loans to pay for the investment.
In July 2005, Sinofert purchased China Fertilizer (Holdings) Company and its subsidiaries, collectively known as the Fertilizer Group.
Sinofert and its subsidiaries are involved in major businesses including production, distribution, and retail of fertiliser raw materials and products, as well as R&D and services in the field of fertiliser-related business and products.
According to Bloomberg, as of 31 December 2008, Sinofert Holdings owned stakes in 13 fertiliser manufacturers with a total capacity of 10.2 million tons, thus becoming the largest fertiliser producer in China.
The invested fertiliser producers manufacture nitrogenous fertiliser, phosphate fertilisers, potash fertiliser and compound fertilisers.
The controlling shareholders of Sinofert are Sinochem Croup and Potash Corporation of Saskatchewan (PotashCorp).
