BHP Billiton has found new tough rival in China's Sinochem Group as it bids for Potash Corp. of Saskatchewan Inc., reports said.

China's Sinochem wants to have a bigger, better offer for Potash Corp. by teaming up with Canadian companies, sources knowledgeable of the discussions said in a Bloomberg report.

An earlier IBTimes.com report said China's energy and chemicals group and a Chinese private equity fund Hopu Investment Management are among potential bidders.

However, among them, state-run Sinochem is the likely favourite to challenge BHP as Potash owns 22 percent stake in its subsidiary Sinofert Holdings, an affiliate that produces potash and fertiliser importer.

China's government authorities may have chosen to backed up Sinochem, which could also have dynamic operational and manufacturing synergies with Potash Corp., now considered as the world's largest producer of the its namesake product nutrient used as a key ingredient of fertilisers.

Sinochem is said to be forming tie-ups with other companies involved in pension funds and other Canadian investors to make it a more viable bid unlike if it will only do it alone.

Analysts said, it is a promising opportunity to try and buy Potash Corp when fertiliser prizes are at a low. Since farmers' spending has been curbed by the lingering effects of the financial crisis.

"The fertilizer industry is gearing for a cyclical recovery because while farmers can get away with the practice of not using fertilizers for one or two growing seasons, crop yields decline sharply after that as the soil becomes depleted of nutrients," said an analyst in another related report of IBTimes.com.