Mitsui Forms Business Alliance with the Yuntianhua Group, which Includes China's Biggest Fertilizer Company

Nov. 2, 2009

Main Contents

On October 20, 2009, Mitsui & Co., Ltd. ("Mitsui") and the Yuntianhua Group ("YTH Group"), reached agreement on the formation of a strategic business alliance encompassing the wide-ranging business segments of the YTH Group. The YTH Group's core activities are the exporting and importing of fertilizer raw materials and chemical fertilizers in China, but it is also involved other areas, such as food raw materials, glass fibers, coal and logistics.

The YTH Group consists of its holding company, Yuntianhua Group Co., Ltd., together with subsidiaries in the five areas of chemical fertilizers (phosphates and nitrates), phosphorus chemicals (yellow phosphorus, etc.), composite materials (glass fiber, cloth, etc.), salt and salt-derived chemicals, and phosphorus ore mining. It is one of the top 10 corporate groups in Yunnan Province, and its nationwide sales of ¥30.5 billion yuan (¥442 billion yen) rank it around 200th in China. The present form of the YTH Group is the result of a series of mergers and acquisitions among major chemical fertilizer companies in Yunnan Province over the past few years in the context of the Chinese government's agricultural development policies.

Chemical fertilizers are particularly important to the YTH Group. With an annual production capacity of 6 million tons, it is the biggest producer of phosphate fertilizers in Asia and the third biggest in the world. The company plans to increase its yearly production to 10 million tons.

The main activities covered by the strategic alliance will be (1) importing of fertilizer raw materials, (2) exporting of chemical fertilizers, (3) importing of food raw materials, (4) exporting of phosphorus chemicals and glass fibers, (5) logistics support, (6) coal importing, and (7) the promotion of joint investment in China.

Both companies plan to use the establishment of the business alliance as a basis for active cooperation and collaboration and to build a closer relationship spanning many areas of business. Each partner will establish a task force to implement core projects under the alliance. The aim is to develop the alliance into concrete business activities through frequent contacts at various levels.

The food market in China is expanding under the impetus of economic development and rising standards of living. This is reflected in a rapid increase in demand for raw materials used in agricultural chemical fertilizers, which are a core industrial segment for the Yuntianhua Group. China is already the world's biggest importer of sulphur, for example, and it continues to implement agricultural development policies. Access to reliable sources of fertilizer raw materials has therefore become an urgent priority. The two companies plan to use their respective strengths in a wide range of business areas as the foundation for a cooperative relationship that will include the use of Mitsui's global business development capabilities to build a joint procurement system for fertilizer raw materials. Mitsui has worked with the Yuntianhua Group for over 10 years in the area of import and export transactions relating to fertilizer raw materials. The strategic alliance was established in response to the Yuntianhua Group's plans for further expansion of its activities.

Profile of Yuntianhua Group Co., Ltd. (holding company)

Head office Kunming City, Yunnan Province, People's Republic of China
Representative Dong Hua, Chairman
Date of establishment 1997
Capital 2,680 million yuan
Sales 30.5 billion yuan
Business segments Phosphate and nitrate fertilizers, phosphorus ore mining, phosphorus chemicals, composite materials, salt and salt-derived chemicals, organic chemicals

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For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Corporate Communications Division
Kazuhisa Kawamura
Telephone: +81-3-3285-7540
Facsimile: +81-3-3285-9819