[Domestic News] Compound Fertilizer: Embracing Market Transformation and Entering a New Path in the Industry

In recent years, compound fertilizer enterprises have continuously tried and changed in new products, e-commerce, direct sales channels, and base capacity layout, and finally found a direction that fits their own development and market demand. Product upgrades focus more on crop yield-increasing micronutrient fertilizers, humic acid fertilizers, etc., refine and integrate traditional channels, and explore new customers. At the same time, the heat of new energy has helped the new development of the phosphorus chemical industry chain, and the leading compound fertilizer companies, such as Xinyangfeng and Stanley, are competing to enter this new business.

From the end of February to now, most compound fertilizer companies have held regional distributor conferences for spring and summer fertilization preparation. The agenda for these conferences includes not only payment discounts but also new product releases, channel building, and the layout of the enterprise's industrial chain. Compared with previous years, the conferences have focused more on new product releases, channel building, and the refinement of management, indicating a shift in the compound fertilizer industry from "extensive management" to "precision management".

1、The new compound fertilizer is aimed at helping crops increase yield.

In 2015, the No.1 Central Document and the Central Rural Work Conference clearly put forward the strategic deployment of "vigorously promoting the reduction of fertilizer use and the increase of efficiency". In the context of the policy of reducing fertilizer use and increasing efficiency, on the one hand, compound fertilizers replace single fertilizers to achieve the goal of reducing fertilizer use and increasing efficiency. On the other hand, the gold content of compound fertilizers is increased, achieving the goal of reducing fertilizer use and increasing efficiency. At the same time, in 2021, food security has become a national strategy. Recently, Premier Li Keqiang said, "Our country has had a grain output of over 1.3 trillion catties for eight consecutive years. Overall, our food security is guaranteed. Next, we will focus on two key points: first, farmland, and second, seeds, to continuously improve our country's food production capacity." This means that as "food for food", the urgency and importance of fertilizer as a help to increase food production are highlighted.

Under the national policy background, it is necessary to increase the gold content of compound fertilizer products. Compound fertilizers not only meet the needs of crops for the three elements of nitrogen, phosphorus, and potassium nutrients, but also add microbiological strains, medium and trace elements, and other components to play a role in soil restoration and promoting nutrient absorption, truly achieving the goal of increasing crop yields and improving quality. From the market perspective, functional compound fertilizers are mainly divided into two categories. One focuses on soil improvement or restoration products, such as organic-inorganic compound fertilizers, bacterial-containing compound fertilizers, soil conditioners, etc. The second category is products that improve nutrient absorption, such as medium and trace element fertilizers, humic acid fertilizers, etc. Zhuochuang Information believes that in pursuit of immediate crop yield increases, the second type of medium and trace element fertilizers and humic acid fertilizers are more popular.

2、The channel co-construction in the compound fertilizer industry focuses on the establishment of farmer cooperatives.

showed that at the end of 2016, there were 3.98 million large-scale agricultural households nationwide; there were 2.04 million agricultural business units, of which 910000 were specialized farmer cooperatives focusing on agricultural production, operation or services. The increase in the number of new business entities has promoted the diversification of compound fertilizer channels. Compared with the traditional dealer channels, farmers' professional cooperatives have a higher acceptance of scientific fertilization and prefer the management concept of reducing costs and increasing efficiency. In line with the change of customer groups, some large-scale enterprises try to sink the channel construction, the implementation of the traditional channel large direct sales channels, squeezing the dealer's living space. In addition, pay attention to the division of customer groups in traditional channels, and encourage medium and large customer groups to dig deep into local farmers' cooperatives. Zhuo Chuang Information believes that under the consideration of sharing market risks, it is preferable for manufacturers to develop collaboratively and build channels together.

3、Integrated Industry Chain to Enhance Competitiveness of Fertilizer Industry .

From the perspective of the layout of the top enterprises, the TOP10 enterprises all have vertically integrated industrial chain layouts, with the phosphorus chemical industry chain represented by Hubei Xin Yangfeng and the coal chemical industry chain represented by Jiangxi Kaimenzi and Henan Xinlianxin. At the same time, the new energy industry will become a new blue ocean in 2022, and leading fertilizer companies have successively invested in phosphate iron projects to seize the new energy track and open the second growth curve. In the supporting of the phosphate iron project, spray composite fertilizer production lines are accompanied by it. The 400,000-ton capacity in Ezhou, Hubei and 200,000-ton capacity in Lihe Fertilizer have been put into operation at the end of 2022, and the 600,000-ton capacity of Songzi Stanley Yihua is planned to be put into operation at the end of 2023. The specific statistical data are shown in the table below.

Zhuo Chuang information point of view:

compound fertilizer industry has developed since the 1980 s, and the scale of the industry has taken shape. In the fierce market competition, "lying down and winning" has become history. Only by actively seeking change can we coruscate new vitality. Zhuochuang Information believes that if the train runs fast, it still needs a headband, and the leading enterprise has a strong leading role. At present, the head of the enterprise fine management focus on "internal and external repair", "internal" lies in their own channel deep excavation, channel information system, etc., in order to enhance their own core strength. "Outside" lies in the product industry, not only to upgrade the compound fertilizer products, but also to broaden the industry, that is, the iron phosphate new energy industry. Internal and external synchronous optimization, in order to truly achieve "cost reduction and efficiency", to maintain the vitality and competitiveness of enterprises.

source: Zhuo Chuang informationClick to view