K&S : K+S Acquires Fertilizer Activities in China

14 July 2016

Expansion of Specialty Business in Asia

K+S is acquiring the activities of Huludao Magpower Fertilizers Co., Ltd. (Magpower), the Chinese producer of magnesium sulphate fertilizers, for a euro amount in the low double-digit millions range, and in doing so, is taking an important step forward in expanding into Asia.

'In line with our management agenda, we are bolstering our competitive position in the specialties area by means of this acquisition and can therefore better tap into the growth markets of South-East Asia,' says Norbert Steiner, Chairman of the Board of Executive Directors of K+S Aktiengesellschaft and Board Member responsible, among others, for the Potash and Magnesium Products business unit. 'We see great sales potential for magnesium sulphate products to the agricultural sectors in China and South-East Asia which we can't service adequately from our German sites.'

Magpower is one of the largest Chinese producers of synthetic magnesium sulphate (SMS), which is used as a fertilizer for oil palms, soybeans and sugar cane as well as for industrial applications.

K+S acquires a modern production site with an attractive cost structure in Huludao City in the northeast Chinese province of Liaoning. The site currently has a capacity of 90,000 tonnes and employs about 50 people. The capacity of the production site could be doubled to 180,000 tonnes in the foreseeable future.

The closing of the transaction is anticipated for the end of this year. Both sides have agreed not to disclose any further details of the transaction.

To date, K+S has only produced magnesium sulphate fertilizers (including ESTAKieserite) from natural deposits at several German sites in Hesse and Lower Saxony. The products produced in Huludao will complement the K+S product range through the addition of highly effective, water soluble magnesium sulphate. This kind of magnesium sulphate has a positive effect on root development, water absorption, yields and plant quality parameters.

About K+S

K+S is an international resources company. We have been mining and processing mineral raw materials for more than 125 years. The products we produce from them are used worldwide in agriculture, food and road safety and are important elements in numerous industrial processes. Potash and salt are integral nutrients for the megatrend of a constantly growing and increasingly prosperous global population striving for a higher standard of living. This will result in increasing consumption of mineral resources. We serve the resulting growth in demand from production sites in Europe, North America and South America as well as through a global distribution network. K+S is the world's largest salt producer and one of the top potash providers worldwide. With more than 14,000 employees, K+S achieved revenues in financial year 2015 of about € 4.2 billion and an EBIT of € 782 million. Learn more about K+S at www.k-plus-s.com.

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