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As of 2012, the compound fertilizer industry in China experienced a challenging period marked by sluggish demand. Despite this, major players in the phosphate and compound fertilizer sector managed to achieve modest year-over-year growth in both revenue and sales, with an average increase of approximately 10%. However, smaller enterprises faced significant challenges, with many either cutting back on production or halting operations entirely due to intense competition.
One of the most notable trends within the industry has been the consolidation in the ammonium segment. By September's end, the top five monoammonium producers held a market share of around 44%, up nearly 10 percentage points from the previous year. Similarly, diammonium producers saw their collective market share rise from 57% to 60%. This trend indicates growing economies of scale among leading firms, allowing them to maintain profitability even as prices for monoammonium have dropped significantly. Recently, the lowest price recorded for monoammonium was 2,600 yuan per ton. While large-scale manufacturers continue to generate profits thanks to their efficient production techniques and access to raw materials, many small and medium-sized enterprises (SMEs) have incurred losses during this downturn.
Looking ahead, we can expect further market consolidation as less competitive firms with outdated technologies, high energy consumption, and capacities below 150,000 tons per annum exit the scene. Meanwhile, SMEs still possess certain strategic advantages that could help sustain their existence in the long term. For instance, businesses located near rivers or coastlines may leverage their logistical strengths to offer storage and transportation services to larger competitors. Additionally, SMEs can adapt to regional market demands by acting as original equipment manufacturing (OEM) hubs for bigger corporations. Such transformations would require careful planning but could prove crucial for SMEs seeking to survive amidst rising industry pressures.
In conclusion, while the compound fertilizer market remains tough, opportunities exist for those who innovate and adapt strategically. Whether through technological advancements or operational efficiencies, staying relevant will demand resilience and foresight from all stakeholders involved.