Asahi Industries, Toyota Tsusho to enter Chinese fertilizer market

Asahi Industries said it would be forming a joint venture in China this December with Toyota Tsusho and Longda Foodstuff Group, a major food company based in Shandong Province, to start the production and sale of organic fertilizers and organic compound fertilizers in the country in 2012.

Toyota will hold a 37% share, Longda 33% and Asahi 30% in Laiyang Longda Asahi Agricultural Technology, which will have 25mn yuan ($3.93 mn) in capital and build a compost plant in Laiyang, some 100km north of downtown Qingdao, which is expected to begin operation in January 2012. A plant to produce organic compound fertilizers is planned for startup in October 2012, giving a combined output capacity of 30,000 t/y.

With its longstanding technical expertise, Asahi will be in charge of aspects such as quality and production control, fertilizer design, and soil analysis. Toyota will take care of marketing, based on its experience in the distribution of biomass-based compost and other business in China. Longda will supply raw materials and supervise the workers.

The joint venture will benefit from the business experience and high brand awareness in China of Longda. Established in 1993 and capitalized at 67.96 mn yuan, the Chinese partner is engaged in food processing, hog raising, meat processing, and the marketing of agricultural products.