SQM announces details of Capex Plan for 2008-2010
On July 24, SQM announced its Capex Plan for the three-year period between 2008 and 2010. The plan includes projected capital expenditures of approximately US$1 billion over the period, including approximately US$350 million for the year 2008.
Patricio Contesse, Chief Executive Officer of SQM, stated, “We are making significant investments that will enable SQM to achieve further growth in its core businesses. Our Capex Plan aims to increase production capacity across our business lines, and especially in potassium-based products, which have become a key contributor to the Company’s margins”.
The primary investments considered in SQM’s three-year Capex Plan include among others (1) capacity increases for potassium-based products at the Salar de Atacama. The most significant project is the increase in production capacity for potassium-based products. Current combined capacity for potassium chloride and potassium sulfate is around 820,000 metric tons, and SQM expects to increase the total capacity for these products by approximately 250,000 metric tons over the next three years. (2) Iodine and nitrates capacity increases. The Company will invest in capacity increases for iodine and nitrates at its Nueva Victoria and Pampa Blanca facilities over the next four years. Pampa Blanca is located in the Antofagasta Region of Chile,near the Company’s Marķa Elena and Pedro de Valdivia facilities. These investments should yield an increase in SQM’s installed capacity for iodine and nitrates on the order of 25% by the end of 2012. (3) New potassium nitrate plant at Coya Sur. The Company is increasing its potassium nitrate production capacity by 300,000 metric tons per year, which is estimated to be operational by 3Q10. The new plant, which will be located at the Company’s Coya Sur operations, will use nitrate salts extracted at SQM’s Nueva Victoria and Pampa Blanca operations.
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