How Do NPK Companies Deal With the Impact of China Market Changes?
Aiming at the problems of NPK sector, domestic NPK companies make many measures to deal with market changes:
On the one hand, they are strengthening efforts to sell in the south and on foreign markets. In the north, the demand for fertilizer in the main grain producing areas is weak, however, the demand for fertilizer in southern fruit planting areas is gradually expanding; and meanwhile, due to the cancellation of taxes for fertilizer exports, the costs for exporting reduce and they are strengthening sales overseas. For example: Xinyangfeng’s operating revenues in the northeast and north China both dropped 7%, however the revenues increased by 14% and 151.37% on southern markets and overseas markets; Stanley’s revenues in the northeast, north China and east China all decreased by 15% and increased by 5% in other regions; Sierte’s revenues on overseas markets increased by 32%.
On the other hand, they are enhancing the promotion and sales of new-type fertilizer. NPK companies all shift to produce new-type fertilizer, such as Kingenta’s water soluble fertilizer, Sierte’s formulated fertilizer, Xinyangfeng’s special fertilizer, Sierte’s functional fertilizer and Batian’s soil conditioners, etc., so new-type fertilizer sales of NPK companies increase by 15%-50%, resulting in an increase in operating revenues of new-type fertilizer. For example, the average gross profit of Kingenta’s fertilizers for gardening goes up 40% and the operating revenues of new-type fertilizer products of Xinyangfeng increase by 8%.