Penrice Soda Expands Chemical & Mineral Production in Australia

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Researched by Industrial Info Resources (Sugar Land, Texas)--Penrice Soda Holdings Limited (ASX:PSH) (Osborne, Australia) is a public company with origins dating back to 1935. Penrice's flagship Chemicals business includes the largest soda ash plant in Southeast Asia and is one of the five largest sodium bicarbonate plants in the world. Penrice has expanded the capacity of its sodium bicarbonate plant from 75,000 tonnes per year to 100,000 tonnes per year. In 2011, Penrice will expand the production capacity of the plant to 130,000 tonnes per year.

At one time, Penrice Soda was South Australia's second-largest consumer of municipal water, but five years ago, the company built a desalination plant. The desalination plant, constructed by Osmoflo (Adelaide, Australia), draws salty bore water from an aquifer 200 meters below ground. Its reverse osmosis system removes all salt from the bore water, which is then used for the manufacturing operations, instead of mains water. This year, Penrice has initiated a $250,000 project to expand the $500,000 desalination plant, which was installed and became operational in August 2010.

Consideration is being given to construct a pilot plant to extract natural sodium salts, which occur in wastewater, from coal seam gas fields in Queensland. These salts could be processed into soda ash, sodium bicarbonate and sodium chloride, and sold to customers in Australia and the Asia Pacific region. An agreement to build a pilot plant is expected to be signed in 2011.

Penrice is the only manufacturer in Australia of soda ash and sodium bicarbonate, and is a significant supplier of limestone and aggregates. The key end-users of Penrice products include world majors in glass manufacturing, mining, food production and medical care organisations in Australia and overseas.

The operations of the Penrice Group are centred around two South Australian divisions--the company's Chemicals business based in Osborne, and the Quarry & Mineral facility at Angaston, in the Barossa Valley.

The Chemicals business supplies two key chemical products:

• Soda ash is sold in the Australian market as a vital ingredient in products such as glass containers (especially wine and beer bottles), flat glass for building and construction, washing powder, and products used in the mining industry.
• Sodium bicarbonate is a specialty chemical used in a variety of applications, including food, pharmaceuticals, medical, personal care products and livestock feed.

The Group's Quarry & Mineral business is based at the Penrice mine in Angaston, South Australia. While the mine supplies a vital ingredient into the chemical process at Osborne, it is also a significant supplier of aggregates and other materials for a variety of end-uses, such as cement and lime manufacturing, construction, roads, landfills, glass manufacturing, mineral processing, agriculture, stockfeed and landscaping.

The company employs more than 300 people and is a major South Australian employer.

Penrice uses the Solvay process, utilising limestone from its mine in Angaston in the Barossa Valley, salt through solar evaporation of seawater at Dry Creek, and ammonia and coke from external suppliers. The limestone is used to recycle the ammonia, producing calcium chloride as waste, which is pumped into the sea with unreacted limestone particles.

Penrice produces 330,000 tonnes per year of sodium carbonate (soda ash). Penrice's main customers are Owens-Illinois Incorporated (NYSE:OI) (Perrysburg, Ohio), Amcor Limited (ASX:AMC) (Abbotsford, Australia) and CSR Viridian Limited (Mount Gambier, Australia).

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