Much like the Troop building, this would be an Advanced Building you can convert one of your buildings to, likely a workshop. It would allow conversion of lesser items into greater items. Using resource costs as a guideline, you could convert lesser healing potions into healing potions, healing potions into greater healing potions, and etc.
It could then be used to upgrade healing potions, antidotes, mana potions, arrows into axes, and etc.
At the highest levels of upgrade of the building, maybe even allow crafting large number of small ascension mats into greater ascension mats. This would make for adding perhaps a costly and time intensive means of getting the currently completely random to get ascension mats.
It would seem to be a highly logical means of solving many complaints people have of getting mats for higher level battle goods as well as highest level ascension mats.