China will allow foreign companies to enter its fertilizer wholesale business from December 11 in a move to further open the fertilizer industry.

"The move will not have a big impact on domestic fertilizer companies, since local companies have most of the market," said Li Guohong, an analyst with China Galaxy Securities.

"But with more foreign investment coming into the sector, some domestic companies have quickened their development pace," he said.

Analysts said since most domestic fertilizer companies lag behind their foreign counterparts in areas such as company management and technology, they'll have to continue to innovate to keep their dominant positions.

This November the nation's top fertilizer firm, Sinochem Hong Kong Holdings, changed its name to Sinofert Holdings Limited while pushing for more reforms at the company.

"The new name Sinofert reflects its core business and is in line with the company's development strategy," it said in a statement.

Sinofert said earlier it aimed to double its market share in China to 30 per cent by 2008 after setting up sales centres in all the major agricultural counties.

"We have 15 per cent of the domestic market and will double our share after distribution centres are set up in 1,800 major counties," said Du Keping, chief executive officer (CEO) of the company.

Sinofert had 1,063 sales outlets, serving 71 per cent of total farmland in China at the end of 2005. It is the fertilizer trading and production arm of state oil trader Sinochem Corp.

The company imported more than half of the 11.17 million tons of fertilizer it sold in 2005. It had a total production capacity of 2.73 million tons at the end of 2005.

China BlueChemical Ltd, the fertilizer-making arm of the nation's top offshore oil company, China National Offshore Oil Corporation (CNOOC), also plans to make a series of acquisitions to increase its output and become an industry leader in five years.

The company currently has about 4 per cent of the nation's nitrogen-based fertilizer market. "We hope to take a leading position in the industry in five years," said its CEO Yang Yexin.

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