Chemtrade is one of the world's largest independent providers of by-product removal services and the leader in the North American market. Let me explain what this means.

Very simply, we operate in the middle ground between certain industries that produce large volumes of useable by-products that must be removed and marketed, and industries where those by-products are valued core ingredients of their operations. Essentially, Chemtrade moves the by-products from producers to users, and along the way provides services that are critical and valuable.
Our business model starts with the critical services we provide to producers of chemical by-products, principally base metal smelters and oil refineries. These producers generate by-products as a result of their primary processing activities and they must be removed to meet environmental regulations and to avoid production interruptions.

For example, smelters like Inco automatically produce sulphur dioxide gas during the smelting process. Most of this emission must be captured and converted into a by-product that can be handled, removed and marketed.

Typically, sulphur dioxide gas is converted into sulphuric acid or liquid sulphur dioxide. Under current environmental regulations, smelters will be required to capture more SO2 emissions which will increase the need for our removal services.

Chemtrade guarantees its removal services, and in its 70 year history, has never caused unscheduled downtime for a producer. Our long-term reliability is the key to our excellent relationships with producers.

We obtain our product from approximately 40 producers with whom we have unique long-term contracts that enable us to mitigate commodity price and volume risk. I will explain these contracts in a minute.

Using our extensive logistical network, we market and distribute the by-products to over 370 customers in a variety of industries and geographic markets. These by-products are valuable base chemicals for their operations.

This diversity of customers reduces market risk from any one customer or industry, and enables us to maximize margins for specialized services.

Chemtrade's earnings and cash flow are quite stable. This stability of cash flow and earnings is driven by our contracting strategy with producers and the diversity of our end-use customers.