Brand: Exploiting fertilizer excess fertilizer

The overcapacity of the former industry was a few days old. The fertilizer companies shattered the competition. The auspicious cloud group can gain a foothold in the unpredictable market and make it a success. Today, what is the reason? How do they "decode" excess? Recently, the reporter interviewed Hu Huawen, chairman and general manager of Hubei Xiangyun Group Chemical Industry Co., Ltd., on these issues.

Reporter: After 40 years of development, today's Xiangyun is not comparable to the past. Can you tell us about the current development and operating performance of Xiangyun?

Hu Huawen: Xiangyun Group is a large-scale chemical enterprise integrating phosphorus chemical industry, chemical industry, ammonia chemical industry, fine chemical industry, and chemical mechanical product production. In the face of losses in the entire industry in 2009, the Group still achieved remarkable results. In the whole year, the total industrial output value was 1.952 billion yuan, and the sales income was 1.553 billion yuan. The production and sales volume of the leading products increased significantly from the previous year. In the first half of this year, sales of compound fertilizers continued to increase rapidly, increasing by more than 8,000 tons year-on-year. In addition, Xiangyun’s brand development strategy is also fruitful. As assessed by a national authority, Xiangyun’s brand value has reached RMB 2.2 billion. At present, Xiangyun Group has become a banner of Huanggang City's industry and has successfully been selected as one of the “Top 100 Chemical Fertilizers in China” and won the “National May 1st Labor Award”.

Reporter: We have learned that the curtain for the expansion of auspicious cloud production capacity is being opened. Under the background of serious overcapacity in the industry, we would like to know where the self-confidence of the cloud expansion comes from?

Hu Huawen: According to the plan, during the “Twelfth Five-Year Plan” period, Xiangyun Group's compound fertilizer production capacity will reach 3 million tons. We are well-grounded for this expansion in the context of excesses. In a certain sense, as long as it is an area of ​​full competition, excess is inevitable. In today's China, there are few remaining lines. At present, there have been some new changes in the compound fertilizer industry. One of them is the characteristics of fast-selling and fast-selling. Therefore, it is necessary for enterprises to reserve a certain amount of surplus production capacity to meet the needs of peak season production, off-season storage and market fluctuations. For enterprises, the focus of future competition will return to cost. Only by maintaining their own cost advantages in the market will they not fall into the "defects" of excess capacity. I repeatedly told the cadres at the company's senior management meeting that the surplus is not terrible. As long as we boldly innovate and reform our existing fertilizer facilities with high-tech, we have the advantages of cost, resources, and market, and we have enough. The confidence promotes the good and fast development of the enterprise.

Reporter: In recent years, the market share of Xiangyun Fertilizer has been steadily increasing. Is it also necessary to expand the energy market to meet the needs of market expansion? In the market where supply and demand are out of balance, what successful operating experience does Xiangyun deserve to share with its peers?

Hu Huawen: In fact, one of the motivations for energy expansion is based on our real market demand. Some time ago, many of Anhui's fertilizer orders were forced to be abandoned. The reason was that our production load had already reached full capacity and it was difficult to increase production to meet the market. In my opinion, the reason why Xiangyun can continue to grow against the backdrop of surplus is the result of three efforts: First, focus. For decades, we have been working hard in the fertilizer industry. We are always on the same page. Our team has accumulated rich market experience and industry experience. This is a precious spiritual resource. The second is resources. Xiangyun is located in a rich phosphorus resource zone and has a strong resource advantage, providing a solid backing for sustainable development of the company. Through our efforts, we have officially received a prospecting permit from the Yiling District of Yichang, which has a reserve of about 200 million tons of phosphate rock. The Lichuan* iron ore mining license has also been obtained, and the mine area has also been expanded from just 3.1 square kilometers to nearly 4 square kilometers, with more than 10 million tons of iron ore reserves. The third is raw material control. In recent years, with its precise eyesight and market judgment, Xiangyun has successfully reduced raw material costs, ensured raw material supply, and achieved significant cost benefits through a series of successful operations.

Reporter: Among the numerous agricultural brands, Xiangyun is able to stand out from the crowd. The current market value of appraisal amounts to RMB 2.2 billion. This is an embarrassing achievement. How does Xiangyun this “golden signboard” cast?

Hu Huawen: I always believe that under the condition of excess capacity, only the brand is the only powerful weapon to resolve excess production capacity. As early as a few years ago, we put forward the strategy of implementing fine brand names and put forward the slogan “Brand is a pass to the world,” putting brand building in a prominent position. For example, we have conducted in-depth quality management activities and continuously improved product quality. Xiangyun Trademark was recognized as "China Famous Trademark" and was successively named "Hubei Famous Trademark". The practice of auspicious clouds has already demonstrated and will prove this. Big brands have huge potential for development in the fertilizer industry in the future, and farmers’ awareness will eventually return to the brand. Promoting brand awareness, persisting in quality, and building a hundred years of auspicious clouds will be a long-term task for us in the future.

Reporter: In the upcoming “Twelfth Five-Year Plan”, what are the concepts of Xiangyun in the face of the overcapacity in the industry?

Hu Huawen: On the whole, in the future, our guiding ideology is to participate in market competition from environmental protection, differentiated products and industrial chain, and we will not simply work hard to build capacity and scale. First of all, Xiangyun will further increase product development efforts, promote the combination of production, learning, and research, produce more quality products, and more new products to meet the market needs of differentiation, individualization, and specialization. In my opinion, such a product is not only left over, but it will have a good market and high prices. Secondly, energy-saving emission reduction and recycling of resources are integrated into the entire process of enterprise development. This is not only a social responsibility that Xiangyun must take on as a large-scale chemical company, but also an important way to promote product upgrading and enhance economic efficiency. Finally, scientifically optimize and seriously integrate the company's raw material supply chain, product chain, logistics chain, and marketing chain. This is a large and elaborate system project. It has great potential and is extremely difficult, but it is also very promising. At present, we are advancing boldly towards the grand goal of “building a hundred years of auspicious clouds and building an eco-industrial park” and strive to build Xiangyun into a well-known production base for chemical, phosphorus, ammonia, fine chemical and chemical machinery. During the "12th Five-Year Plan" period, the company will strive to exceed 10 billion yuan in annual sales revenue to make greater contribution to the revitalization of the local economy. We firmly believe that this goal is not far away.