Qinghai Salt Lake Development to boost in potash production
Beijing. January 27. INTERFAX-CHINA - Qinghai Salt Lake Development Co., Ltd (Salt Lake Development) plans to invest RMB 2.5 billion ($379.77 million) to boost its production capacity of potash fertilizer by one million tons, its parent company Qinghai Salt Lake Potash Co., Ltd (Salt Lake Potash) announced Jan. 27.
The expansion will double Salt Lake Development's annual potash production capacity and take 18 months to complete, according to the announcement. It will be financed through funds raising and bank loans.
The parent company hopes the project will boost Salt Lake Development's net profit, which tumbled from RMB 1.89 billion ($287.1 million) in 2008 to RMB 1.51 billion ($229.38 million) in 2009.
Salt Lake Potash holds a 50.91 percent stake in the subsidiary while Qinghai Salt Lake Industry Group Co. Ltd (Salt Lake Industry) owns the remaining 49.09 percent.
Salt Lake Development has a registered capital of RMB 1.1 billion ($167.10 million).
Salt Lake Potash also said that its merger with Salt Lake Industry received approval from the State-owned Assets Supervision and Administration Commission (SASAC) last December and will be completed in the first half of 2011.
Potash hit the headlines last year when BHP Billiton launched an audacious $39 billion hostile takeover for the world's largest potash producer Canada-based Potash Corporation of Saskatchewan Inc.
China is the world's biggest consumer of potash. The market for potash is largely controlled by two competing organizations Canpotex and Belarusian Potash Company.
China produced 3.97 million tons of potash in 2010, according to the China Petroleum and Chemical Industry Federation.
-Li Xin