News Releases

23 Jun
2023 6

Chemtrade Provides Business and Project Updates

Increases 2023 Adjusted EBITDA guidance to over $450 million Cairo, OH ultrapure acid expansion project on track Arizona ultrapure acid joint venture project on hold

TORONTO, Ontario, June [23], 2023 – Chemtrade Logistics Income Fund’s (TSX: CHE.UN) (“Chemtrade” or the “Fund”) visibility into the balance of 2023 has improved as we approach the end of the first half of 2023. Chemtrade had previously advised that it expected 2023 Adjusted EBITDA1 to be at or above 2022’s record level of $430.9 million. Chemtrade now believes that 2023 Adjusted EBITDA will exceed $450 million. This guidance considers the recent declines in the North East Asia spot index value for caustic soda. Caustic soda now represents less than 60% of realized MECU netbacks, which is significantly lower than the approximately 80% level from a few years ago. Sodium chlorate is now also a more significant contributor to the Adjusted EBITDA of the Electrochemicals (EC) segment.

As previously advised in May 2023, the capital costs for the KPCT Advanced Chemicals joint venture greenfield ultrapure sulphuric acid plant in Arizona have come in significantly higher than originally estimated. The joint venture has now had a chance to analyze the results of the front-end engineering design (FEED) studies and has looked for cost savings where possible. However, Chemtrade believes the costs cannot be further reduced to any material extent. The aggregate capital costs for this project are now estimated to range between US$300 million and US$380 million, which represents an increase of approximately 50% over the original estimate. Roughly half of the increased cost is due to higher labour costs to build the plant, with the balance due to equipment costs and some changes in scope to ensure compliance with regulations.

Together with our joint venture partner, Chemtrade has made the decision to put the project on hold while revised commercial agreements are negotiated with customers to ensure that the project generates an acceptable level of return. In light of this decision, Chemtrade will provide an updated organic growth capital expenditure range for 2023 when it releases its second quarter results in August 2023.

“This was a difficult decision for us, but we need to make sure that any project we enter will achieve an acceptable level of financial return for our investors. In this case, putting the project on hold will enable the joint venture to continue negotiations to secure acceptable contracts with offtake partners”, stated Scott Rook, President and Chief Executive Officer of Chemtrade, “While nothing is certain, given the expected growth in demand by the major chip producers for ultrapure acid in North America, we believe that we will reach agreements to supply KPCT ultrapure sulphuric acid to the new fabs being built and expect to provide additional updates on this project before the end of 2023.”

Mr. Rook added, “In the meantime, our Cairo ultrapure sulphuric acid expansion project continues to be on time and on budget, with an expected start up in 2024. As just announced with our updated guidance, our other businesses are performing extremely well and we now expect 2023 to generate a record level of Adjusted EBITDA.”

About Chemtrade

Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America’s largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is also the largest producer of high purity sulphuric acid for the semiconductor industry in North America. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products, liquid sulphur dioxide, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.

Caution Regarding Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking statements can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking statements in this news release include statements respecting certain future expectations about: our expectation that Adjusted EBITDA for 2023 will exceed $450 million; our belief that the joint venture’s capital costs cannot be materially further reduced; the joint venture’s ability to negotiate acceptable contracts with offtake partners while the project is on hold; that the expected growth in demand by major chip producers for ultrapure acid in North America will materialize; the joint venture’s ability to reach supply agreements with new fabs being built; the timing of when additional project updates will be available; the expected start-up date of our Cairo ultrapure sulphuric acid expansion project and our expectation to generate a record level of Adjusted EBITDA in 2023. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation the risks and uncertainties detailed under the “RISK FACTORS” section of the Fund’s latest Annual Information Form and the “RISKS AND UNCERTAINTIES” section of the Fund’s most recent Management’s Discussion & Analysis.

Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Fund has made assumptions regarding: recent declines in the North East Asia spot index value for caustic soda.

Except as required by law, the Fund does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.

Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at

  1. Adjusted EBITDA is a Total of Segments measure. Certain additional disclosures for financial measures have been incorporated by reference and can be found starting on page 33 in the MD&A for the quarter ended March 31, 2023 dated May 10, 2023, available on SEDAR at and on the Fund’s website (

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For further information:

Rohit Bhardwaj
Chief Financial Officer
Tel: (416) 496-4177
Ryan Paull
Corporate Development Manager
Tel: (973) 515-1831