CHEMTRADE LOGISTICS ANNOUNCES ACCRETIVE ACQUISITION AND OFFERING OF SUBSCRIPTION RECEIPTS

Increase in quarterly distributions per unit announced

TORONTO, July 29, 2003 - Chemtrade Logistics Income Fund (TSX: CHE.UN) (“Chemtrade”) announced today that it has agreed to purchase the B.C. Chemicals Ltd. (“BCC”) operations and assets (the “BCC Business”) of Canadian Forest Products Ltd. (“Canfor”) for $117.3 million. BCC is the exclusive supplier of sodium chlorate to Canfor’s Prince George pulp and paper mills, as well as a supplier to third parties. The acquisition expands and diversifies Chemtrade’s existing operations and earnings on a product, geographic and customer basis, improving the stability of its earnings stream.

The acquisition is structured to include 10-year exclusive contracts under which Canfor will purchase the majority of the BCC Business’ production of sodium chlorate and pay a fee for the processing of the soap skimmings from Canfor’s plants into crude tall oil (“CTO”). The majority of the BCC Business’ remaining sodium chlorate is sold under multi-year contracts to third parties. The contractual nature of the majority of the BCC Business is expected to contribute a consistent level of earnings to Chemtrade.

On a pro forma basis, for the six months ended June 30, 2003, the BCC Business acquisition would have increased Chemtrade’s basic distributable cash available by approximately $0.10, or 11%, to $0.97 per unit from $0.87 prior to the acquisition. On a fully diluted basis, Chemtrade’s distributable cash available would have increased by approximately $0.09, or 10%, to $0.95 per unit for the same six-month period.

Following acquisition closing, Chemtrade intends to increase its expected annual distribution rate by $0.04 to $1.80 per unit. It is expected that the increase will be implemented by increasing each of the four supplemental quarterly distributions by $0.01 per unit. Consistent with its conservative distribution policy, Chemtrade will improve the stability of its distributions to unitholders by increasing the holdback of distributable cash post closing of the acquisition and only increasing the payout ratio when it is determined to be appropriate.

$86.4 Million Subscription Receipt Offering

Chemtrade has entered into an agreement to sell, to a syndicate of underwriters led by CIBC World Markets Inc., 5,860,000 Subscription Receipts, at $14.75 per Subscription Receipt for gross proceeds of approximately $86.4 million. The Subscription Receipts are exchangeable for Chemtrade Units on a one-for-one basis upon the closing of the acquisition of the BCC Business.

BCC Business

The BCC Business is currently, and will continue to be, Canfor’s exclusive supplier of sodium chlorate and processor of soap skimmings into CTO. The production of sodium chlorate is the primary component of the BCC Business, with CTO production comprising only a small part. Sodium chlorate is used as a bleaching agent in the production of pulp. CTO is used as an alternative fuel to natural gas but, more importantly, permits mills providing the feedstock to operate at higher capacity.

A key element of the transaction is Canfor’s 10-year purchase contracts that cover the majority of the output from the BCC Business. The sodium chlorate agreement requires Canfor to purchase a minimum volume at a price, which is subject to adjustment on a dollar-for-dollar basis for cost changes in the primary inputs. The CTO agreement is structured as a fee arrangement, which is also similarly subject to adjustment for changes in the costs of processing the soap skimmings.

Mark Davis, President and Chief Executive Officer of Chemtrade, said the acquisition is an excellent addition to Chemtrade and is consistent with its business model. “We are very pleased to be entering into a long term relationship with Canfor. The BCC Business has been a critical supplier to Canfor for many years and will continue to be in the future. Our 10-year agreements with Canfor link the fees Canfor pays to the major input costs, thereby substantially mitigating price and volume risks for Chemtrade. Since Canfor purchases the majority of the output, this operation will produce high quality stable earnings for Chemtrade and its unitholders.”

The BCC Business being acquired by Chemtrade is located in Prince George, British Columbia adjacent to the Canfor Intercontinental Mill. The production utilizes state-of-the-art manufacturing processes and is just completing an upgrade. The BCC Business has 36 full time employees.

For the six months ended June 30, 2003, the BCC business generated revenue of approximately $24.9 million and EBITDA of approximately $10.1 million. From 2000 to 2002, BCC increased revenue and EBITDA at CAGR’s of 5.5% and 14.1%, respectively, reaching revenue of $52.4 million and EBITDA of $20.1 million in 2002.

Increasing Distributions per Unit

On a pro forma basis, for the six months ended June 30, 2003, basic distributable cash available for the combined businesses would have been $0.97 per unit, an increase of approximately $0.10, or 11%, per unit on a standalone basis, prior to the BCC Business acquisition. On a fully diluted basis, Chemtrade’s distributable cash available would have increased approximately $0.09, or 10%, to $0.95 per unit, for the same six-month period.

Mr. Davis said that, “Since our IPO in July 2001, Chemtrade’s conservative distribution policy has allowed us to plan for the future while still increasing annual distributions by approximately 18% over our first two years. This year has been particularly challenging due to the ongoing Inco strike and the rapid increase in the value of the Canadian dollar. Consistent with our conservative policy, we are pleased to announce our plan to increase our supplemental quarterly distribution by $0.01 to $0.12 per unit effective with our third quarter (payable at the end of October 2003), increasing the annual distribution rate by $0.04 to $1.80 per unit, assuming closing of the acquisition before the end of August. As indicated by the pro formas we expect the BCC Business to contribute substantially more than this initial increase in our distribution, thus increasing our holdback cushion. Once the Inco strike settles we will examine the amount of distributable cash being generated and consider whether a further increase in distributions is sustainable and therefore warranted.”

Details of Offering

The Subscription Receipts are exchangeable on a one-for-one basis for units of the Fund on the closing of the acquisition of the BCC Business. The Subscription Receipts will be issued by way of short form prospectus to be filed with securities regulatory authorities across Canada. The Subscription Receipts have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States.

Closing of the Offering is expected to occur on August 15, 2003, approximately two weeks before the expected closing of the acquisition of the BCC Business on August 29, 2003. The net proceeds of the Offering, combined with a $40 million committed increase in Chemtrade’s term credit facility, will fully fund the acquisition.

If the acquisition is completed in August 2003 as expected, purchasers of the Subscription Receipts who hold their securities on the relevant record dates will be eligible for both the August monthly distribution, paid at the end of September to holders of record at the end of August and the third quarter supplemental distribution declared in mid-October and paid at the end of October.

About Chemtrade

Chemtrade Logistics removes or produces four major products – sulphuric acid, liquid sulphur dioxide and elemental sulphur (collectively, “Commercial By-Products”) and sodium hydrosulphite (“SHS”). Chemtrade is the largest North American producer and marketer of SHS, a high value sulphur-based product, and is the largest North American independent provider of removal and marketing services for Commercial By-Products.

The statements contained in this news release that are forward-looking are based on current expectations, and are subject to a number of uncertainties and risks, and actual results may differ materially. These uncertainties and risks include, but are not limited to: the dependence on certain key suppliers, competitive pressures and changes in market activity, risks associated with international operations and foreign exchange, legal proceedings, environmental, health and safety and other regulatory requirements. Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at www.sedar.com.

A conference call to discuss the acquisition will be webcast live on http://www.newswire.ca/webcast on Wednesday, July 30, 2003 at 9:00 a.m. EST.

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