Migao, SQM announce potassium nitrate jv

News Briefs, Potassium Nitrate

Vienna-Migao Corp., a leading producer of specialty potash fertilizers for the Chinese market, and Sociedad Quimica y Minera de Chile S.A. (SQM) of Santiago, Chile, the world’s largest producer and distributor of potassium nitrate, announced May 20 at the International Fertilizer Association Conference that they have created an investment framework agreement for a joint venture for the production of potassium nitrate in China for domestic and international distribution. The jv will create a new enterprise jointly owned 50/50 by Migao and SQM. The agreement calls for the construction of a new 40,000 mt/y potassium nitrate facility in China, which is expected to be operational in the first quarter of calendar 2009 at a capital cost of US$20 million. Migao, through its wholly-owned subsidiaries, will continue to produce potassium nitrate in China, and distribute it through the newly formed jv. The jv will distribute any exports of potassium nitrate produced by Migao or the jv, as well as imports of SQM’s potassium nitrate to China. In addition, the jv will distribute any exports of products produced by Migao. “We are very pleased to enter into this agreement with SQM. This mutually beneficial agreement leverages SQM’s strong international network and Migao’s established presence throughout China,” said Mr. Liu Guocai, Migao’s CEO. “This agreement expedites Migao’s ambition of becoming recognized as a leading international fertilizer company.” Patricio Contesse, SQM CEO said, “We are thrilled at this opportunity to work with Migao in the growing Chinese market, as we believe the synergies we are creating will benefit us both. This agreement will allow us to further develop our presence in one of the most important markets for the fertilizer industry, and it is consistent with our strategy of strengthening our worldwide leadership position in our three core businesses.” SQM and Migao will now take the next steps to effect the jv, including seeking the necessary approvals from the Chinese government.