"Present serious fertilizer industry overcapacity, resulting in product prices, overstock, nitrogen fertilizer production enterprises, especially small businesses worrying. Fertilizer industry as a whole in the first quarter performance is not satisfactory, the root cause is excess capacity to blame." Shandong Luxi Chemical Group General Manager Jiaoyan Bin appeal turned fertilizer enterprises should increase the pace of eliminating excess capacity as soon as possible adverse effects, to achieve a healthy growth. 

According Jiaoyan Bin, China's production capacity of 71.3 million tons of urea available in the next 3 to 5 years, there will be nearly 25 million tons of new capacity built; to "Twelve Five", the domestic demand is expected to be 60 million tons of urea, plus export 5,000,000 tons, the actual demand of 65 million tons. Competition in the existing market conditions, is expected to have six million tons less competitive capacity may lose out, including the high cost of raw material supply is unstable or the production capacity of 456 million tons, according elimination half count, out of about 2 million tons , plus half parking capacity 1.35 million tons, or about to exit long idle production capacity 2.57 million tons, still nearly 20 million tons of excess capacity. 

Jiao Yanbin said, shortly before the fertilizer industry in Shandong Province held working meeting, delegates said the main cause of overcapacity, although there role in promoting financial crisis, but the country also has some policy guidance deviations, one big pressure small, two fertilizer production capacity is concentrated to the resource. 

It is understood, is currently under construction and a new fertilizer projects must achieve a certain production capacity, possible approval. Although such a manner so that enterprises in terms of size, cost, and has great advantages, but it also caused some of the excess capacity. 

Jiaoyan Bin said that in recent years by the impact of national policy guidance, Inner Mongolia, Xinjiang and other coal, natural gas resources are more abundant in areas of production capacity increased dramatically, while the main producing areas of grain and cotton production capacity of urea decreased. There are figures showing the end of this year, China's major grain producing areas (Heilongjiang, Liaoning, Jilin, Shandong, Henan, Hebei, Jiangsu, Anhui, Hubei, Hunan, Jiangxi) urea production capacity of 4,000 tons, accounting for the country's 50%; raw material resources to (Shanxi, Xinjiang, Inner Mongolia, Shaanxi, Sichuan, Guizhou and Ningxia) urea production capacity of 32 million tons, accounting for about 40%. 

"Fertilizer raw material resources to serious overcapacity, while the main grain-producing areas 'hungry' becomes more prominent contradiction between supply and demand. Fertilizer peak season, due to the use of chemical fertilizers to put into operation less, causing some regions Quefei, high fat phenomenon, increasing transportation costs. "Jiao Yanbin said. 

Faced with a situation of excess nitrogen fertilizer production capacity, Jiao Yanbin said that countries and companies need to work together in order to effectively resolve the overcapacity bring the drawbacks and adverse effects. National policy guidance and control from the first, the implementation of ammonia, urea access conditions, and strictly control new capacity; second is to speed up the backward production capacity out; three is to protect the main grain and cotton producing areas of moderate capacity; Fourth, should be encouraged to develop Enterprise exit policy; five is proposed to abolish the preferential railway tariffs fertilizer. 

"Enterprise also according to their own situation, identify the location, speed turned the pace of transformation initiative to win space for development." Jiao Yanbin said. According to him, Shandong Province as the country's first nitrogen-producing provinces in the elimination of backward production capacity has achieved initial results. Qingdao Tianzhu, Liang Feng Zhucheng, Weifang Venus, Qingzhou Shengxing other urea plant, Gimhae Yantai, Rizhao Fumin, Ju County Yinfeng, Weishan Wu Fu, Rongcheng Heng large, Heze Tai Long, ammonium bicarbonate plant has quit the fertilizer industry . Nitrogen fertilizer business by the end of 2009, the province's 48 was reduced to the current 32. 

Jiao Yanbin said, insisted fertilization integrated development can also be effectively transferred part of the excess capacity, using technology to fill fertilizer to fertilizer to promote the technology. Shandong nitrogen fertilization integration companies in the development of a useful exploration, and walk in the forefront of the industry. Luxi Chemical from coal chemical, salt chemical industry, public works and other infrastructure industries start, new chemical materials in accordance with the direction of gradually extending the product chain. Currently has 300 million tons more than 40 kinds of chemical products production capacity, has formed a complete coal chemical, salt chemical industry, chemical industry chain fluorosilicone achieve the adjustment of product structure. 

"A medium-sized fertilizer plants through product adjustments, transferred 60,000 tons of synthetic ammonia production capacity is not difficult, 50 enterprise is 3,000,000 tons, representing a decrease of 5,000,000 tons of urea production capacity." Jiao Yanbin said. 

Independent innovation is the transformation and upgrading of enterprises, to overcome the adverse effects of overcapacity fundamental way. Jiao Yanbin, at present the majority of low-tech enterprise transformation projects, imitative strong, popular and dependable and more on energy, resource dependency is still very strong. Resources, energy use is not sufficient, value-added is not ideal. Therefore, the nitrogen fertilizer business to improve resource utilization levels and energy saving, safety and environmental protection and other aspects of new breakthroughs, and scientific layout, explore new industries, cultivate new economic growth points, thus completing the transformation and upgrading of the target. Luxi Chemical has developed a cohesive energy of urea, slow release urea, urea, potassium and other varieties, according to the different crops in different regions and user needs, developed a variety of new fertilizer nutrient content more than 70 varieties, and enhance the enterprise development vitality.