Xinyangfeng to Invest 6.2 Billion Yuan in Phosphorus-based New Energy Projects in Jingmen

When an upstream material enterprise’s products continuously gain recognition from downstream customers and form stable supply relationships, its capacity expansion is often regarded by the market as a low-risk and highly certain capital expenditure. Xinyangfeng, a leading Chinese phosphate compound fertilizer enterprise, announced on April 28 that it plans to invest in two projects in Jingmen, Hubei Province — its headquarters and birthplace — with a total investment of about 6.2 billion yuan, aiming to upgrade its industrial chain in phosphorus-based new energy and fine phosphorus chemicals.

As a leader in China’s phosphate compound fertilizer industry, Xinyangfeng seized the opportunity of the new energy industry’s development and began to extend its business to the phosphorus-based new energy and new materials sector in 2021, while consolidating its leading position in the phosphate compound fertilizer industry. Up to now, it has built and put into stable operation two sets of iron phosphate production units with a total annual output of 100,000 tons, gradually forming a dual-main-business development pattern of “phosphate compound fertilizer + phosphorus-based new energy and new materials”, reported Xinhua News Agency.

The company’s existing iron phosphate products are mainly supplied to downstream lithium iron phosphate enterprises such as Jintang Times, Changzhou Liyuan, Wanrun Yichang Bangpu, Wanhua Chemical and Jinquan New Materials. After long-term multi-batch verification by customers, Xinyangfeng’s iron phosphate products have reached the advanced industry level in terms of batch stability and impurity control, with both production units currently operating at full capacity and products in short supply. Its first 50,000-ton/year iron phosphate production line, jointly built with Changzhou Liyuan, was the first of its kind to meet production standards in the industry, China Economic Net reported.

A financial analyst, Li Wei, noted that good customer reputation and stable supply relationships have directly translated into the enterprise’s financial advantages. “They reduce the risk of customers replacing suppliers, shorten the business negotiation cycle and enhance customer stickiness,” he said.

The two new projects will fully leverage the technical accumulation and customer resources of the existing iron phosphate units. The “Phosphorus-based New Energy and New Materials Project” in Dongbao District will extend downstream, with a planned investment of about 3 billion yuan to build a 300,000-ton/year lithium iron phosphate production line and supporting 200,000-ton/year iron phosphate units, forming an integrated production line from iron phosphate to lithium iron phosphate.

Meanwhile, the “Fine Phosphorus Chemical Industry Chain Project” in Zhongxiang City will extend upstream towards high purification, with a planned investment of about 3.2 billion yuan to build a 100,000-ton/year iron phosphate production line, upgrade fine phosphorus chemical facilities and construct supporting projects. Zhongxiang Base, adjacent to Lianhuashan Phosphate Mine, enables direct transportation of phosphate ore to production workshops by belt, bringing obvious cost advantages, China Economic Net added.

Notably, Xinyangfeng’s Phosphorus-based New Energy and New Materials Research Institute has accumulated research in refined phosphoric acid, iron phosphate and lithium iron phosphate in recent years, with some technologies achieving breakthroughs. The two new projects are the industrialization of these technological achievements.

At present, the two projects have completed the board of directors’ approval process. The next step is to submit them to the shareholders’ meeting for deliberation and promote the signing of formal investment agreements with local governments. Benefiting from its good customer reputation and the location advantage of Jingmen’s lithium battery industrial cluster — which has gathered nearly 100 upstream and downstream enterprises — Xinyangfeng’s capacity expansion is expected to become the main engine of its second growth curve, according to CNR.cn.