January 19, 2011 / 12:52 PM / 9 years ago

UPDATE 2-Migao-SQM fertilizer JV in China starts production

* Migao says JV capacity is 40,000 tonne per year

* Sees production of 570,000 tonnes by end of 2011 (Recasts, adds details, share movement)

Jan 19 (Reuters) - Canadian fertilizer maker Migao Corp MGO.TO said production has started at its potassium nitrate joint venture with Chile’s Soquimich (SQM.N) in China.

The Toronto-listed Migao, which operates specialty potash fertilizer plants across China, said the 40,000 tonne-per-year production capacity from the Sichuan JV is in addition to 80,000 tonne per year at its wholly owned facility.

“This comes at a time when fertilizer demand is outpacing supply in China,” Migao Chief Executive Liu Guocai said in a statement.

Migao and SQM, one of the world’s top iodine producers, will hold equal stakes in the venture.

Apart from its own produce, the JV will distribute Migao’s export of potassium nitrate and SQM’s import to China, one of the world’s biggest potash importers.

Migao also said production at the 40,000 tonne-per-year potassium sulphate facility at its Shanghai subsidiary is expected to start in March.

The company, which produced about 320,000 tonnes of its core products in 2010, expects to ramp up production to 570,000 tonnes by the end of the year.

Migao’s shares, which have gained about 13 percent in value in the past year, were trading up 5 Canadian cents at C$8.24 on Wednesday on the Toronto Stock Exchange while those of SQM were down 12 cents at $56.70 on the New York Stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Joyjeet Das)

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