Israel Chem to Invest €160 Million in Spanish Unit
Fertilizer and specialty chemicals maker Israel Chemicals (ICL) said it would invest €160 million ($231.6 million) in the first phase of an efficiency plan for its Spanish unit, Iberpotash.
The plan calls for an expansion of Iberpotash's mine and processing facility at Cabanasas and Suria, near Barcelona, and the phasing out of operations at another Iberpotash mine and processing facility, ICL said in a statement on Wednesday.
The goal of the efficiency plan is to lower the cost of Iberpotash's mining operations, increase its production of potash and salt products and improve its environmental footprint, ICL said.
The first stage is planned to be completed in early 2014.
"ICL's decision to upgrade its operations in Spain is a further illustration of ICL's strategy to expand its operations worldwide, including our potash mining operations in Spain and England," Kees Langeveld, president of ICL Fertilizers Europe, said in the statement.
"The efficiency plan will increase our production of potash in Spain, reduce our manufacturing costs and allow us to enter the quality salt market."
The second stage of the plan, which has not yet been approved, calls for an additional expansion of Suria's potash manufacturing capacity, with the goal of producing 1.1 million tons of potash, 630,000 tons of which will be granulated potash and 50,000 tons of technical potash, as well as 1.5 million tons of salt.
ICL said it expects the execution of the plan to generate significant savings and efficiencies of scale due to the fact that larger quantities of potash and salt will be mined and processed in a single location, as opposed to today's mining and processing in two locations.
It said it will benefit from these savings already at the end of the first stage, enabling it to achieve reduced potash manufacturing costs for its Spanish subsidiary.
ICL noted that Iberpotash's management believes that the Spanish and Catalan governments will recognize the expansion plan's potential to benefit the local economy, and will therefore provide financial assistance to support its implementation.
