Migao's plants are strategically located based on a number of criteria including access to sea and/or rail ports, proximity to customers and local infrastructure.
The first phase of Migao's initial fertilizer plant was Sichuan Migao in Chengdu City, Sichuan Province, PRC which commenced operations at the end of 2003, with the second phase of the plant commencing operations in September 2004. Sichuan Migao produces potassium nitrate with ammonium chloride as a co-product. Sichuan Migao uses a low energy, re-circulation process that it developed and for which the patent has been granted as described below. This 100,000 tonne per year compound fertilizer facility began shipping blended fertilizer in January 2010.
Migao's second fertilizer plant was built and is operated by Guangdong Migao in Foshan City, Guangdong Province, PRC and produces powdered potassium sulphate along with hydrochloric acid as a co-product. This plant was completed and put into operation at the end of 2004.
Liaoning Migao is Migao's third fertilizer plant. Located in Yingkou City, Liaoning Province, PRC this facility was completed and put into operation in December of 2005. This plant produces both granular and powdered potassium sulphate, depending on customer requirements, in each case with hydrochloric acid as a co-product.
Changchun Migao is the fourth fertilizer plant of the Migao. Located in Changchun, Jilin Province, production of both powdered and granular potassium sulphate, with hydrochloric acid as a co-product, commenced on December 21, 2007. An additional 40,000 tonnes per year potassium sulphate expansion was completed in December 2011.
A potassium sulphate fertilizer production facility at Shanghai Migao began test production in March 2011 and commenced regular production in December, 2013. Shanghai Migao produces potassium sulphate fertilizer with hydrochloric acid as a co-product. The production facility at Shanghai Migao operated at its normal capacity during Fiscal 2015 as the demands for potassium sulphate are recovering with the firming of potash prices.
A 40,000 tonne per annum potassium nitrate facility, currently owned 50-50 by the Company and SQM through a WFOE, Sichuan SQM - Migao, commenced production in January 2011. The potassium nitrate from this facility has a lower moisture content compared to that produced at Migao's wholly-owned facility. This water soluble product allows the fertilizer to be converted into a liquefied potassium nitrate by third parties. One of the target markets for this product is cut flowers, a high value crop.
The production of NPK compound fertilizer is affected by seasonality of compound fertilizer applications. Therefore, Migao's NPK production lines at Zunyi, Sichuan and Yunnan are generally not operating at full capacity in the first and second quarters of the fiscal year. The specialty compound fertilizer facility was built at Zunyi, Guizhou Province in southern China, with the initial 100,000 tonne module was completed in the fourth quarter of Fiscal 2012. The property will accommodate another module of equal size if and when market conditions justify the expense.
The Phase I 100,000 tonnes per annum NPK line at Luliang, Yunnan Province, was built by Yunnan Migao. Phase I commenced trial production in the fourth quarter of Fiscal 2014 and Yunnan Migao was acquired by Eurochem Migao on October 28, 2014. Eurochem Migao is owned by 50-50 by HK Migao and EuroChem.
China is the world's largest consumer of fertilizers and as economic conditions continue to improve, its population consumes more with a diet diverse in fruits, vegetables and meat. To increase both quality and yield of high value crops such as fruits, vegetables, cotton, and tobacco, farmers require increasing amounts of specialty fertilizers. Migao has developed an excellent reputation as a reliable supplier of high quality potassium nitrate and potassium sulphate, which fits the needs of some of China's largest agricultural entities.