Canada’s Superior finds SPC growth prospects 'attractive'

14 November 2002 23:08  [Source: ICIS news]

TORONTO (CNI)--The sodium chlorate and sodium chlorite businesses of Sterling Pulp Chemicals (SPC) offer very good growth prospects, particularly in the fast growing municipal water treatment market, the buyers said Thursday.

Calgary, Alberta-based Superior Propane Income Fund, which yesterday agreed to buy SPC for $375m (Euro371m) from Sterling Chemicals Holding, said today that SPC will provide Superior with a solid "platform for growth in 2003 and beyond."

Said Grant Billing, executive chairman of Superior Propane: "SPC’s is a mature business with stable cash flow and has good growth potential over time. It has a strong competitive position and strong margins."

Billing was briefing analysts here on the acquisition, which was first disclosed Wednesday.

He stressed that SPC is one of the world’s largest producers of sodium chlorate for the pulp and paper industry. With a capacity of approximately 450 000 tonne/year, SPC commands about 23% of total North American capacity.

SPC, based in Toronto, has six production facilities strategically located across North America, "allowing the company to adjust its production to optimise energy costs," Billing said. Energy is a large cost factor in producing sodium chlorate

But Billing also cited SPC’s "leadership position" in the water treatment and water technology business.

SPC is poised to become the world’s largest producer of sodium chlorite when its new 5000 tonne/year sodium chlorite plant at Thunder Bay, Ontario comes on-stream early next year, Billing said. Sodium chlorite is used to generate chlorine dioxide for water treatment and food processing applications,

He said: "The water technologies business represents an attractive growth opportunity as the municipal water treatment market converts to new technologies, including chlorine dioxide."

Superior plans to operate SPC’s business separately from its propane business.

Billing noted that SPC’s seller, Houston, Texas-based Sterling Chemicals Holdings, also operated SPC as a separate unit from its petrochemicals business.

Superior will retain SPC’s management team, led by Paul Timmons.

Billing added that he expects to complete the acquisition by year-end.

By: Stefan Baumgarten
+1 713 525 2653

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