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Sterling Pulp Chemicals, Ltd., a wholly- owned subsidiary of Sterling Chemicals, Inc., today announced that it will construct a 110,000 ton per year sodium chlorates plant in Valdosta, Ga.The new facility, expected to cost over $50,000,000, will increase Sterling Pulp Chemicals' total annual capacity by more than 30 percent to nearly 460,000 tons. Sodium chlorate is the major raw material in the manufacture of chorine dioxide, which is rapidly becoming the bleaching chemical of choice for North American pulp producers.
Robert N. Bannon, president of Sterling Pulp Chemicals, said, "While the majority of North American sodium chlorate consumption is in the United States, two-thirds of North America's production has been in Canada. Our expansion into the southeastern United States is tangible proof of our strong commitment to the growing needs of our customers in this region. "We believe growth in demand for sodium chlorate will be especially strong through the rest of the decade, particularly in the southeast United States, as the pulp and paper industry moves toward 100 percent substitution of chlorine dioxide for elemental chlorine in the pulp bleaching process," Bannon said.
Valdosta was selected from a group of excellent prospective locations in southern Georgia because of its proximity to customers and to reliable, competitively priced electricity, one of the most important variables in sodium chlorate production costs. Bannon said, "We are very impressed with Valdosta. Cooperation among government, business, the military and the university creates an environment for growth that is unique to the area. We are excited about becoming a part of this great community. I know our people will be happy in Valdosta and will contribute to its continued success." Sterling intends to purchase approximately 70 megawatts of electricity for the new plant from Colquitt EMC The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. , which is supplied by Oglethorpe Power Corporation. The agreement between Sterling and the two power suppliers is subject to final approval by their respective Board of Directors. Bannon added, "Oglethorpe and Colquitt are a strong team. We are confident that our electric service will be first class."
The facility is expected to require a workforce of up to 125 people during construction, and about 30 permanent employees will be located at the plant. Construction will begin as soon as possible this summer. Although a significant amount of equipment is specialized and can only be produced by a limited number of fabricators, Sterling intends to use local suppliers and services wherever practicable. "Chlorine dioxide's growing demand is the result of several factors. Bleaching with chlorine dioxide significantly reduces pulp mill emissions on a cost effective basis without sacrificing quality of the bleached pulp. Demand continues to grow for paper products that are elemental chlorine-free. In addition, regulatory authorities in both the United States and Canada increasingly support chlorine dioxide bleaching over alternative technologies. We expect chlorine dioxide will be the pulp and paper industry's bleaching chemical of choice into the 21st century," Bannon said.
The Georgia plant will be Sterling's second largest sodium chlorate facility. Sterling Pulp Chemicals currently has four plants in Canada with a combined production capacity of 350,000 tons annually. Sterling Pulp Chemicals also is debottlenecking its existing facilities for additional sodium chlorate production to meet growing demand. Sterling Pulp Chemicals also markets chlorine dioxide generator technology under the ERCO trademark. This technology converts sodium chlorate to chlorine dioxide at the pulp mill site. The company designs and manages the construction of the generators and provides technical assistance to customers. "The additional sodium chlorate capacity will allow customers to continue moving toward 100 percent substitution of chlorine dioxide for elemental chlorine bleaching. We also expect increased demand for our generator technology with the continuing growth in demand for chlorine dioxide, since we have supplied two-thirds of the modern generators used in the world," Bannon said. The facility is part of a major capital program announced earlier by Sterling. The $200 million, three-year program will direct cash flow into both new facilities and modernization projects that are intended to maximize long-term value for the company's shareholders.
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