St. Louis, Missouri and Houston,
Texas
December 12, 2003
Sterling Chemicals,
Inc. (OTC: SCHI) and
Monsanto Company (NYSE: MON) announced today that the
companies have extended existing business agreements that will
restart a key production facility in Texas City, Texas and
establish Sterling as a supplier of one of the key ingredients
in the production of Roundup herbicides, Monsanto’s flagship
herbicide product line.
As a
result of the extension of the operating and supply
agreements, Monsanto and Sterling have committed to restart a
production facility in Texas City that produces disodium
iminodiacetic acid (DSIDA), which will be used by Monsanto in
its production of Roundup herbicide.
A target
date for the restarting of production has not been determined,
but the agreements allow for Monsanto to commission the
reopening anytime between the signing of the agreement and
2007.
The DSIDA
production facility was originally commissioned in 2000 with
capital funding provided by Monsanto. The facility was
subsequently operated under contract by Sterling, which also
operates a neighboring acrylonitrile production facility in
Texas City, Texas that provides a raw material used to produce
DSIDA. Operations at the facility were discontinued in 2001
prior to Sterling entering Chapter 11 bankruptcy. Sterling
emerged from bankruptcy in December 2002.
Richard
K. Crump, Sterling's President and Chief Executive Officer,
said "We are very excited about our new agreement with
Monsanto for the restart of the DSIDA production facility at
Texas City. The operation of the DSIDA facility will
significantly enhance the cost competitiveness of our Nitriles
business by permitting us to receive chemical value for a
significant portion of the by-products produced from our
acrylonitrile operations."
“We’re
very pleased to be working with Sterling in this venture,”
said Mark Leidy, executive vice president, manufacturing for
Monsanto. “With Sterling coming on line as a supplier of
DSIDA, we’ll have valuable flexibility to source an important
ingredient for one of our key product lines, which is an
important benefit to Monsanto as we make our production
processes more efficient and cost effective.”
Monsanto
currently produces DSIDA for use in Roundup production at
manufacturing locations in the United States and Brazil and also
sources DSIDA through existing supply agreements with another
U.S. third-party manufacturer.
The
agreements also resolve all disputes between the companies that
were pending in the Bankruptcy Court for Sterling prior
bankruptcy proceedings. The agreements are subject to the
parties final approval and approval of the Bankruptcy Court.
Additional specific terms of the business agreement were not
disclosed.
Based in Houston, Texas, Sterling Chemicals, Inc. manufactures a
variety of petrochemical products at its facilities in Texas
City, Texas.
Monsanto
Company is a leading provider of technology-based solutions and
agricultural products that improve farm productivity.
Roundup is a
trademark owned by Monsanto Company and its wholly owned
subsidiaries. References to Roundup products in this release
mean Roundup branded and other glyphosate-based herbicides,
excluding lawn-and-garden products. |
