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Analysis of the Cause of "Shandong Fertilizer Phenomenon
Shandong Province has consistently ranked first in the country for the total output of chemical fertilizers. In 2007, the province produced 7.429 million tons of synthetic ammonia, accounting for 14.42% of the national total. Urea production reached an impressive 11 million tons, making Shandong the leading producer of urea in China. The province's fertilizer market is known for its stability and influence, often referred to as a "barometer" for the national fertilizer industry. Some observers believe that the "Shandong Fertilizer Phenomenon" reflects the perseverance and enterprising spirit of the local people. Others compare it to the family-based industrial model seen in the southeastern coastal regions like Jiangsu and Zhejiang.
Industry experts highlight several key factors behind Shandong’s success. First, active and steady technological transformation has been central to the growth of the fertilizer sector. In the 1980s, small nitrogen fertilizer plants in Shandong shifted their production toward urea, capitalizing on a shortage in the market and quickly capturing a large share of demand. This early move allowed them to accumulate capital and develop leading domestic technologies. By the 1990s, innovations such as the "two coals and one coal" technology introduced by Shouguang Chemical Fertilizer Plant significantly reduced energy consumption, cutting coal use per ton of ammonia from 2,000 kg to under 1,900 kg. Similarly, Gaomi Chemical Fertilizer Plant’s two-water closed-loop system, introduced in 1985, achieved over 80% water savings and was later adopted by ten small nitrogen fertilizer companies in Weifang.
In recent years, Shandong's chemical fertilizer industry has continued to modernize, forming large-scale enterprise groups with advanced production processes and diversified raw material sources. Companies have established strategic alliances, strengthened international branding, and expanded into global markets under the "Lu Fei" label. This has helped secure a stable and significant market share both domestically and internationally.
Second, scientific and technological innovation has played a crucial role. Companies have embraced a collaborative approach, partnering with universities and research institutions such as China Agricultural University, Tsinghua University, and the Chinese Academy of Sciences. These partnerships have led to the introduction of over 40 advanced technologies and billions of yuan in investment. For example, Jin Zhengda Company, Shandong Agricultural University, and the Shanghai Research Institute of Chemical Industry jointly participated in the national "Eleventh Five-Year Plan" project for new fertilizers, contributing to the development of controlled-release fertilizer standards. In 2007, Shandong Shi Ke Feng Chemical Co., Ltd. partnered with the Chinese Academy of Sciences to establish a large-scale, long-term sustained-release compound fertilizer production base.
Third, government support and industry coordination have been vital. Local governments have prioritized the fertilizer industry, providing funding and policy guidance. For instance, the Linfen Municipal Government treated the fertilizer sector as a key pillar industry, allocating special funds to promote compound fertilizer development. The Shandong Fertilizer Industry Association has also played a critical role, organizing conferences and shaping the industry's development strategy. Industry leaders emphasize that while individual companies may not be large, the region’s geographical concentration, shared market, and technical expertise create a strong competitive advantage. Through years of technological advancement and market optimization, Shandong has developed a mature fertilizer cluster, requiring continued leadership from major enterprises to drive innovation and ensure sustainable growth.