Thursday, December 27, 2012

Failed to develop lithium iron phosphate in succession

As China's two well-known phosphorus companies -Jiangsu Chengxing Phoshorus-Chemcials Co., Ltd. (Jiangsu Chengxing) and Liuguo Chemical Industry Co., Ltd. (Liuguo Chemical) failed to develop lithium iron phosphate in succession, competitors should be cautious about choosing their business for expansion.
On Nov. 11th, Jiangsu Chengxing, known as China's top phosphate chemical producer, announced that it plans to withdraw capital from its holding subsidiary — Jiangyin Tiancheng New Energy Technology Co., Ltd. (Tiancheng New Energy), amounting to USD2.97 million investment. Jiangsu Chengxing's move is mainly affected by mediocre development of lithium iron phosphate since the establishment of Tiancheng New Energy.
With a registered capital of USD10.62 million, Tiancheng New Energy was formed by Jiangsu Chengxing in April 2010. Thereinto, Jiangsu Chengxing accounts for 28% stakes. In accordance with the initial scheme, Tiancheng New Energy should get into the mass production of lithium iron phosphate. 
In addition to Jiangsu Chengxing, Liuguo Chemical, as a listed company specializing in producing phosphate fertilizers (DAP, MAP and types of compound fertilizers), also takes a hit in extension of lithium iron phosphate.
On June 18th, 2010, Liuguo Chemical and Sichuan University signed a two-year technical service contract. According to the contract, Sichuan University should develop production technology of lithium iron phosphate to achieve mass production. However, the target of mass production was not realized till expiration of contract. Nonetheless, Liuguo Chemical expressed that they would not give up the development of lithium iron phosphate. The cooperation with Sichuan University is still in progress, as noted by one insider from the company.

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