Guizhou Chanhen and Guoxuan Holdings to set up a joint venture to establish an iron(III)-phosphate project with an annual production of 500,000 tons

Publish time: 6th October, 2021      Source: CCM
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  Chuanheng Co., Ltd. is a leading enterprise in the phosphorus chemical industry based in the Guizhou province of China, and the company's production and sales capacity is about 600,000 tons per year. Guoxuan Group is an industrial group based in Hefei city of China's Anhui province, with total assets of more than 50 billion yuan. Guoxuan group has three business divisions: real estate, industry, and new energy operations. On September 7, Chuanheng Ltd. issued an announcement that it would sign framework and cooperation agreements with Guoxuan Group for cooperation in the area of phosphorus-based battery materials and fluorine-based battery materials.

According to the agreement, Chuanheng Co., Ltd. and Guoxuan Group have jointly established Hengxuan New Energy Materials Co., Ltd. with a registered capital of 800 million yuan. Among the registered capital, Chuanheng has contributed 480 million yuan in cash, accounting for 60% of the equity, and Guoxuan Group contributed 320 million yuan in cash, accounting for 40%. In addition, the two parties plan to establish a joint production line for battery iron(III) phosphate with a capacity of no less than 500,000 tons per year. The companies further plan to expand their production scale and move into new product types based on market conditions and the needs of the companies.


  New agreement comes amid shortage in lithium battery precursor materials

  According to the agreement, the two parties will cooperate in establishing a new material joint venture company to promote research and development, as well as in the production and sales of phosphorus-based lithium battery materials. The companies will also work together in battery recycling and resource recycling.


  As a precursor material for lithium iron phosphate, iron(III) phosphate is in short supply, and there is a great shortage in production capacity. According to information published on the official website of Chuanheng, the company will also construct two iron(III) phosphate production projects with a total production capacity of 200,000 tons per year in the future. Chuanheng will take advantage of its upstream connections in the phosphorus chemical industry by using its own phosphorus chemical products as the main raw materials to gain an active role in the iron(III) phosphate and lithium iron phosphate industries. Ultimately, Chuanheng aims to seize new opportunities in the energy market to meet the growing demand for iron(III) phosphate in China and overseas.


  With new agreement, Chuanheng expected to increase lithium battery market presence in future

  A spokesperson from Chuanheng stated that this new agreement will not have any impact on the company's operating performance in the current year. However, as Chuanheng and Guoxuan develop a deeper partnership in the future, this new cooperation is expected to have a positive impact on Chuanheng's business development.


  According to market analysis, this cooperation will help Chuanheng use its advantages in resources and technology to expand the company's presence in the lithium battery market. Furthermore, the company's development of battery-use iron(III) phosphate and related materials business will give Chuanheng an opportunity to pivot into the green energy market in the future.


  For more information, please check our Phosphorus Industry China Monthly Report.



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