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Analysis of the Cause of "Shandong Fertilizer Phenomenon
Shandong Province has long been the top producer of chemical fertilizers in China. In 2007, the province produced 7.429 million tons of synthetic ammonia, accounting for 14.42% of the national total, while urea output reached an impressive 11 million tons—making it the largest producer in the country. The pricing of urea in Shandong is often seen as a market barometer, and some refer to this phenomenon as "the Shandong Fertilizer Model." This model is said to reflect the perseverance and hardworking nature of Shandong people, similar to the family-based industries found in the southeastern coastal regions like Jiangsu and Zhejiang.
Experts suggest that the success of Shandong's fertilizer industry can be attributed to several key factors. First, the proactive and steady implementation of technological upgrades has played a crucial role. In the 1980s, small nitrogen fertilizer companies in Shandong shifted their production to urea, capitalizing on the high demand during a shortage period. This early move allowed them to capture the market, accumulate capital, and develop leading domestic technologies. By the 1990s, innovations such as self-sufficiency in synthetic ammonia through coal-based technology significantly reduced energy consumption, lowering coal usage per ton of ammonia from over 2,000 kg to under 1,900 kg.
In addition, water-saving technologies, such as the two-water closed-loop system developed by Gaomi Chemical Fertilizer Plant, helped save over 80% of water use. These advancements were widely adopted across the region. In recent years, Shandong’s fertilizer industry has continued to modernize, forming large-scale enterprise groups and improving production processes. Companies have diversified raw material sources, reduced dependency on single inputs, and established strong brand recognition both domestically and internationally under the "Lu Fei" (Shandong Fertilizer) image.
Another important factor is the emphasis on scientific and technological innovation. Companies have actively partnered with universities and research institutes, such as the Chinese Academy of Agricultural Sciences, Tsinghua University, and Shandong Agricultural University, to conduct joint research and introduce advanced technologies. For instance, Jin Zhengda Company collaborated with Shandong Agricultural University and the Shanghai Research Institute of Chemical Industry on national projects related to controlled-release fertilizers, contributing to the development of industry standards.
Lastly, government support has been vital in shaping the industry. Local governments have prioritized the fertilizer sector, providing funding and policy guidance. Associations like the Shandong Chemical Fertilizer Industry Association have also played a key role in coordinating development plans and fostering collaboration among enterprises. With its geographical concentration, shared resources, and skilled workforce, Shandong has naturally formed an industrial cluster. Through leadership from major enterprises and a supportive environment, the province continues to drive innovation and maintain a competitive edge in the fertilizer market.