TSX:SPF.UN
CALGARY, Aug. 8 /CNW/ - Superior Plus Income Fund (the "Fund") is pleased to announce that ERCO Worldwide, a division of the Fund, will be converting its Port Edwards chloralkali facility from mercury based technology to membrane technology. The current mercury based plant would be projected to close within the next 5 to 7 years and this conversion will extend the facility life for an additional 25 to 30 years. The investment in the facility conversion is estimated to be USD $95 million (including capitalized interest and working capital of $8 million). Start-up of the new state-of-the-art technology is projected for the last half of 2009, pending the completion of the permitting process.
The Port Edwards facility is the third largest producer of potassium chloralkali products in North America and has a strong competitive position with a track record of stable cash flow which will be further enhanced with completion of the project. The project will commence immediately and can be accommodated with minimal disruption to current operations. The project is expected to be accretive to unitholders generating an estimated USD $17.5 million in increased operating cash flow in its first full year of operation utilizing current chlorine and caustic prices. Long term sustainable earnings before interest, taxes, depreciation and amortization is forecasted to average USD $26 million over the life of the facility. The project is expected to provide the Fund with an after tax rate of return greater than 15%.
In commenting on the investment, Grant Billing, Chairman and Chief Executive Officer, stated, "We are extremely pleased to announce this attractive investment which will further diversify our North American specialty chemical business and provide incremental growth in distributable cash flow for our Unitholders. Our strong balance sheet combined with the proceeds from our DRIP equity program and our new $535 million syndicated debt facility allows the Fund to capitalize on attractive investment growth opportunities from all of our business units in the future."
Paul Timmons, President of ERCO Worldwide, stated, "Membrane is a proven technology and provides significant environmental benefits over the existing mercury based technology. This conversion significantly extends facility life, increases capacity of the facility by approximately 30%, reduces operating costs through enhanced efficiency of electrical energy and maintains flexibility in facility operations. The Port Edwards expansion allows ERCO Worldwide to diversify its overall portfolio by increasing its product mix in chloralkali and reducing its dependency on the North American sodium chlorate market."
ERCO Worldwide is a founding member of the Canadian Chemical Producers' Association (CCPA) and is a member of the American Chemistry Council (ACC). Accordingly, ERCO is committed to the industry principles of Responsible Care, including taking steps where possible to reduce environmental risk and respond to community concerns. This project will eliminate the use of mercury on the site and therefore address both issues simultaneously.
About Superior Plus and the Fund
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Superior Plus Income Fund is a diversified business trust. The Fund holds 100% of Superior Plus LP, a limited partnership formed between Superior Plus Inc., as general partner and the Fund as limited partner. Superior Plus is focused on stability of distributions with value growth and has four Canadian based operating divisions: Superior Propane is Canada's largest distributor of propane, related products and services; ERCO Worldwide is a leading supplier of chemicals and technology to the pulp and paper industries and a regional Midwest supplier of chloralkali and potassium products; Winroc is the seventh largest distributor of walls and ceilings construction products in North America; and Superior Energy Management provides fixed-price natural gas and electricity supply services in Ontario and natural gas in British Columbia and Quebec.
The Fund's trust units and convertible debentures trade on the Toronto Stock Exchange as follows:
Trading Symbol Security Issued and Outstanding ------------------------------------------------------------------------- SPF.un Trust Units 86.5 million SPF.db.a 8% Debentures, Series 2 $ 59.0 million principal amount SPF.db.b 5.75% Debentures, Series 1 $174.9 million principal amount SPF.db.c 5.85% Debentures, Series 1 $ 75.0 million principal amount -------------------------------------------------------------------------
Forward-Looking Statements
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Except for the historical and present factual information, certain statements contained herein are forward-looking. Such forward-looking statements are not guarantees of future performance and involve a number of known and unknown risks and uncertainties which may cause the actual results of the Superior Plus Income Fund (the "Fund") or its wholly owned partnership, Superior Plus LP ("Superior") in future periods to differ materially from any projections expressed or implied by such forward-looking statements and therefore should not be unduly relied upon. Any forward-looking statements are made as of the date hereof and neither the Fund nor Superior undertakes any obligation to publicly update or revise such statements to reflect new information, subsequent events or otherwise.