Canexus Expected to be Canada’s Largest Spender in the Chemical Industry for 2007

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Researched by Industrial Info Resources (Sugar Land, Texas). The chemical processing industry (CPI) of Canada consists of approximately 578 operational plants based on Industrial Info’s plant database employing more than 40,000 people. Canexus Limited Partnership (TSX:CUS-UN) (Calgary, Alberta) operates five plant locations in Canada where it has consistently invested in new capacity over the past several years. Continuing its trend to invest in growth oriented projects, Canexus is planning an estimated $165 million in just two of its Canadian plant locations during 2007. This equals almost a third of all CPI spending activity forecast for Canada in 2007, as identified by Industrial Info.

The largest project is the potential $100 million expansion of its North Vancouver, British Columbia chlor-alkali plant. This expansion would not only boost the plants 151,000 metric tons per year of chlorine production capacity but also include major process conversions to eliminate existing mercury cell technology, replacing it with newer and more environmentally friendly membrane cell technology. Aker Kvaerner Chemetics (Vancouver, British Columbia) is assisting Canexus on technology evaluations and preliminary design with the expectation of submitting an AFE request by the end of the year. Construction of this project could begin late summer 2007 if all engineering and planning is completed early in the year.

Another major expansion planned for next year is the addition of a new sodium chlorate unit in their Brandon, Manitoba plant. This $60 million project is the most recent in a long string of major investments completed at the Brandon site since 2000. Aker Kvaerner Chemetics is providing engineering and construction services for this project with plans for construction to begin in the first quarter of next year. Canexus currently operates four cell rooms at the Brandon site, each with 12 electrolyzers. Starting next year, Canexus will begin a seven-year long initiative to recoat five to seven electrolyzers each year costing nearly $2.5 million per year as part of its annual capital budget.

This expansion of chlor-alkali products by Canexus is consistent with the trend of continued investments in this segment of the CPI, see related Industry Alert titled: Investments in Chlorine Capacity Continue to Rise.

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