04 June 2001 00:00 [Source: ICB]
Norsk Hydro and Chile's SQM have signed a letter of intent to enter a new commercial agreement covering speciality fertilisers. The proposed new agreement will broaden the existing arrangements, signed in quarter one 1999 and covering Hydro's calcium nitrate and SQM's potassium nitrate products.
The new deal will allow SQM to use the distribution network of Norsk Hydro in countries where the presence and commercial infrastructure of the latter is larger than that of SQM. In the same fashion, in markets where SQM's presence is greater, both parties' products will be handled by SQM.
The result, says Hydro, will be to enable both sides to cut their sales and distribution costs and at the same time increase the range of products offered to customers.
In addition, Hydro and SQM intend to establish a new joint production company in Europe to which they will transfer their existing soluble fertiliser blending operations. The jv will be able to achieve synergies and cost savings in terms of production, administration and commercialisation of soluble blends.
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