SQM signs joint venture agreement with MIGAO Corporation
Sociedad Química y Minera de Chile S.A. (SQM) announced that it has entered into an agreement with Migao Corporation of China to create a joint venture for the production and distribution of potassium nitrate in China. The agreement, signed on May 18, 2008, establishes a 50/50 contribution to the JV. The first step of this agreement will be the construction of a new 40,000 mt potassium nitrate facility, which will require a total investment of US$20 million and should be operational by 1Q 2009.
Patricio Contesse, CEO of SQM, stated, “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.” He continued, “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.”
Mr. Liu Guocai, Migao's CEO, said, “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. This agreement expedites Migao’s ambition of becoming recognized as a leading international fertilizer company.” Migao, through its wholly owned subsidiaries, will continue to produce potassium nitrate in China, and this product will be distributed by the newly formed JV. In addition, the JV will handle exports of potassium nitrate produced by Migao or the JV, as well as imports of SQM’s potassium nitrate to China.
SQM and Migao will now take the next steps to effect the JV, including seeking the necessary approvals from the Chinese government.
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