Canexus Income Fund

Canexus Income Fund

June 16, 2010 08:43 ET

Canexus Provides Update on TCP Startup at North Vancouver Facility and Other Growth Projects

CALGARY, ALBERTA--(Marketwire - June 16, 2010) - Canexus Income Fund (TSX:CUS.UN) (the "Fund") today provided an update on the startup of the Technology Conversion Project ("TCP") at its North Vancouver chlor-alkali facility and other growth projects.

Following shutdown of the old chlor-alkali facility at North Vancouver on April 30, we successfully completed final construction and tie-in of the new facility to site infrastructure. Final commissioning and startup activities commenced the last week of May. Prior to energizing the production units and with all supporting units operating, a design improvement need was identified and the startup process was interrupted to address this. The design change is underway and we expect startup to commence the week of June 21, with commercial shipments before the end of June. The startup delay has impacted product availability and we are working diligently with customers to minimize disruption.

"This design improvement is necessary to assure safe operation and environmental performance of the new facility and gives us a high degree of confidence in the plant's ability to reliably deliver design capacity," said Andy Lacara, Senior Vice President, Operations.

The design change is not expected to have a significant impact on the final total cost of TCP. The impact of the delay in startup on operating results for the second quarter is expected to be offset by other gains realized in the quarter.

"The anticipated successful startup of TCP will be a significant milestone for Canexus. We expect to begin seeing the benefits in the third quarter, with benefits expected to be $35 to $43 million in incremental operating cash flow annually," said Gary Kubera, President and CEO. "I would like to thank our site and project teams, as well as all the supporting groups, for their continuing efforts to assure a successful startup of TCP."

Nearly 60 percent of anticipated TCP benefits will come from cost savings from reduced electricity consumption per MECU, reduced staffing, the virtual elimination of natural gas usage and less maintenance spending. The remaining 40 percent of anticipated benefits will come from volume expansion.

Also at North Vancouver, the completion of the hydrochloric acid project is on track for startup in July. The project is expected to increase acid capacity by 70,000 tonnes, improve operational flexibility and add approximately $2 million of operating cash flow annually.

In Brazil, both the 4,400 metric tonne sodium chlorate expansion project and the project to sell excess hydrogen at our South American facility successfully started up in the second quarter and the hydrochloric acid expansion project, which is supported by a long-term take-or-pay contract, is on schedule for startup in the third quarter. These three projects combined are anticipated to provide incremental annual operating cash flow of $5 million.

Our North American Terminal Operations project to construct rail infrastructure for access by a second major rail carrier at the Bruderheim, Alberta, site is nearing completion and is anticipated to add an incremental $2 million in annual operating cash flow when completed early in the third quarter.

Forward-Looking Statements

This news release contains forward-looking statements and information relating to expected future events and results of the Fund, Canexus LP and its subsidiaries, including with respect to the timing, nature and extent of the benefits to be derived from TCP, the expenses related thereto and TCP's contribution to operating cash flow and with respect to the timing of completion, and the operational capacity and contribution to operating cash flow, of the Fund's other capital projects. The use of the words "expects", "anticipates", "continue", "estimates", "projects", "should", "believe", "plans", "intends", "may", "will" or similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including market and general economic conditions, future costs, treatment under governmental regulatory, tax and environmental regimes and the other risks and uncertainties detailed under "Risk Factors" in the Fund's Annual Information Form filed on the Fund's SEDAR profile at Management believes the expectations reflected in these forward-looking statements are currently reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Due to the potential impact of these factors, the Fund and Canexus LP disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law. 

About Canexus

Canexus produces sodium chlorate and chlor-alkali products largely for the pulp and paper and water treatment industries. Our four plants in Canada and one in Brazil are reliable, low-cost, strategically-located facilities that capitalize on competitive electricity costs and transportation infrastructure to minimize production and delivery costs. Canexus also provides fee-for-service hydrocarbon transloading services to the oil and gas industry from its terminal at Bruderheim, Alberta. Canexus targets opportunities to maximize unitholder returns and delivers high-quality products and services to its customers. Canexus units and convertible debentures trade on the Toronto Stock Exchange under the symbol CUS. More information about Canexus is available at

Contact Information

  • Canexus Limited
    Gary Kubera
    President and CEO
    (403) 571-7300
    Canexus Limited
    Richard McLellan
    (403) 571-7300