Recently learned from the Department of Commerce of Shandong Province that the province will encourage powerful companies to invest in fertilizer production projects in Africa by establishing investment consortia, strengthening bank-enterprise cooperation and facilitating project swaps.
Li Xinggao, deputy director of the Overseas Investment Management Office of the Department of Commerce of Shandong Province, said that most African countries lack autonomous fertilizer industry. To this end, the African Development Bank has established a fertilizer fund since 2007, established a regional fertilizer purchasing and distribution agency, and provided special subsidies to the fertilizer industry to achieve a target of 50 kg per hectare by 2015. Multinational governments in Africa have also taken measures to encourage the production and use of fertilizers, which provides a large market space for the development of the fertilizer industry.
Li Xinggao believes that the issue of overcapacity in Shandong Province is particularly prominent and that “going out†is an inevitable choice. According to reports, on the one hand, the production equipment of chemical fertilizer companies in Shandong Province is basically a superposition of multiple sets of equipment, and the single equipment is too small. At the same time, raw materials for the production of nitrogen, phosphorus and potash are also lacking, which leads to an increase in production costs. On the other hand, Shandong fertilizer companies started earlier and have the technical foundation, financial strength, and management experience to carry out overseas investment.
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