Columbian Chemicals Co. moves ahead with new facility in Bahia, Brazil

Columbian Chemicals Co. received approval from the Phelps Dodge Corp. Board of Directors to proceed with plans to build a greenfield carbon black manufacturing facility in the Camacari Pole, a chemical complex in the Bahia state of Brazil. Construction of the facility is anticipated to begin in early 2006 with production commencing the first quarter of 2007.

Columbian will utilize the latest environmental and energy conservation technologies in this state-of-the-art facility. Construction cost is estimated at US$67 million for the 55,000 metric ton facility, which will have the capability of expanding as the market develops.

“This project is further evidence of Columbian’s ongoing commitment to remain a global leader in carbon black,” said James P. Berresse, president and CEO. “The tire manufacturing industry is rapidly growing in the Bahia region with several of our largest customers already there or making plans to be there. As the recognized market leader in Brazil, Columbian intends to maintain our leadership position by growing with these customers and continuing to provide value-added products and services.”

Columbian received the construction permit in June from Bahian environmental authorities and has all of the necessary permits and approvals to proceed with the project. The company completed the preliminary engineering and economic analysis earlier this year. Furthermore, the company is engaged in ongoing discussions with customers in the region for anticipated supply.

Columbian Chemicals Co. is one of the world’s leading producers of carbon black – an engineered material that improves the strength, durability and overall performance of a range of products including tires and other mechanical rubber goods, as well as inks, paints, plastics and coatings.

The company owns and operates 12 carbon black manufacturing facilities in Brazil, Canada, England, Germany, Hungary, Italy, Korea, Spain and the United States. Based in Marietta, Georgia, Columbian Chemicals Co. is a subsidiary of Phelps Dodge Corp. (NYSE:PD), one of the world’s leading producers of copper and molybdenum-based chemicals and continuous-cast copper rode, and among the leading producers of magnet wire and carbon black. Phelps Dodge Corp. and its two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ approximately 15,000 people worldwide.

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