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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