Chemical company seeking funds to relocate its facility

Guangdong Zhanhua Group Co, the largest calcium superphosphate producer and sixth-largest diammonium phosphate manufacturer in China, is seeking strategic investors to fund the relocation and expansion of its production facilities.

The Zhanjiang chemical fertilizer manufacturer plans to move to a chemical industrial park on Donghai Island by 2015 next to the giant Sino-Kuwaiti refinery being built, said Chen Geng, chairman and general manager of the company.

The relocation is estimated to cost 3 billion yuan ($489 million), which will be invested in expanding capacity, upgrading technology and raising environmental standards, he said.

The timing for the move was set at a meeting attended by city government officials and Zhanhua executives in April.

Founded in 1958 and now wholly owned by the city government, Zhanhua sells calcium superphosphate on the domestic market and exports diammonium phosphate.

It generates revenue totaling 3 billion yuan, with a yearly capacity to produce 600,000 tons of diammonium phosphate and 1.2 million tons of calcium superphosphate.

It plans to discontinue the production of calcium superphosphate at the new site and to instead produce for export calcium triple superphosphate, which sells at four times the price.

Annual revenue is projected to grow to 5 billion yuan in the first phase on Donghai Island and 9 billion yuan during the second phase.

"We will make world-leading products at the new site," Chen said.

The technology of Zhanhua lags behind its counterparts in the United States and Europe but not by much. This gap will be bridged by new production facilities as well as imported catalysts and filters, which will also raise environmental standards, he said.

As part of the future circular economy on Donghai Island, Zhanhua will use the sulfuric exhaust gas from the adjacent steel and refining complexes to produce sulfuric acid, which will cut costs by 300 million yuan every year.

The synthetic ammonia from the refinery will be conveniently transported to Zhanhua as raw material.

Meanwhile, Zhanhua is looking to acquire a share in a phosphate ore mining operation in western Australia, Chen said.