Chemtrade Logistics Income Fund is a Canadian chemical manufacturing and distribution company with over 60 locations across North America and Brazil. Its diversified business segments service the oil and gas, water treatment, pulp and paper, technology, and food and beverage industries.
Where might the average person come across Chemtrade’s products in their daily lives?
Chemtrade operates across two main business segments: sulfuric acid and water treatment chemicals (SWC); and electrochemicals (EC). Sulfuric acid is integral to producing gasoline and semiconductor chips. At the gas pump, the gasoline being used likely involves sulfuric acid in its production. We’re also North America's largest producer of inorganic coagulants, with over 35 plants across the U.S. and Canada, ensuring safe drinking water. In semiconductors, our ultra-pure sulfuric acid cleans chips before they’re packaged. Achieving such purity is critical; the level of precision required can be likened to removing just two grains of sand from an Olympic-sized swimming pool.
Our other key area is electrochemicals. Through the chlor-alkali process, we produce caustic soda and chlorine by separating saltwater with electricity. These chemicals have numerous applications, such as treating safe drinking water and in pulp and paper production. For example, chlorine from Chemtrade is used to treat over 70% of drinking water in Western Canada and up to 60% in the Western U.S. Additionally, we convert some of this chlorine into hydrochloric acid, widely used in oil and gas fracking, particularly in Western Canada, where demand is rising due to new natural gas pipelines and export terminals.
How is Chemtrade’s product portfolio divided between traditional and emerging markets, and do you foresee this shifting?
The portfolio is dynamic. Traditional markets like gasoline production still rely heavily on sulfuric acid. While electric vehicles (EVs) may impact this demand, we anticipate stable or even growing needs for high-octane gasoline, which uses more sulfuric acid. Regulations for fuel efficiency could drive this trend. Fertilizer production and water treatment chemicals also show consistent growth, with water treatment growing 4-5% annually due to population growth and stricter regulations for industrial wastewater treatment.
On the other hand, pulp and paper—particularly white paper—is a declining market, especially in Canada and the U.S. However, the Brazilian market is booming, driven by faster-growing trees and increased global demand. Brazil’s capacity to grow trees in seven years compared to 40-50 years in Canada positions it as a growing hub for pulp and paper, similar to Saudi Arabia’s role in oil. Sodium chlorate, a bleaching agent for white paper, is seeing robust demand in Brazil. Beyond Brazil’s growing pulp and paper market, the country’s water treatment sector presents significant opportunities. Currently, only 40-50% of Brazil’s sewage is treated, but the government aims to increase this to over 90% within five years. This will require substantial investment in plants and chemicals to treat both drinking and wastewater. While achieving this timeline may take longer, the potential for growth in water treatment chemicals in Brazil is enormous.
Chemtrade is vocal about the need to place significant emphasis on safety and sustainability. How exactly has progress been made in these areas?
That is correct; Chemtrade has always been focussed on the safety of our employees and the communities in which we operate. I am proud to say that we have recently moved into the top 25% of North American chemical companies in terms of safety performance ranking. We achieved this through data analysis and targeted initiatives. For instance, to eliminate chemical burns from materials like sulfuric acid, we mandated enhanced personal protective equipment (PPE) and rolled out strict guidelines, which reduced injuries significantly. Although not initially popular—particularly in hot regions like Texas—employees understood the importance of safety and complied with the changes.
On the sustainability front, we are working with another company that will convert hydrogen, a byproduct of our sodium chlorate production, into renewable natural gas. This project will reduce greenhouse gas emissions and is an innovative way to enhance environmental responsibility. It also aligns with several government priorities.
Water scarcity and quality are growing concerns. How is Chemtrade working to advance improvements in water treatment?
Water quality is multifaceted, involving removing contaminants, killing bacteria, and addressing emerging issues like per-and polyfluoroalkyl substances (PFAS and microplastics. While we excel in coagulant production, filtration—a rapidly growing field—is an area we’re exploring.
Currently, coagulants address bulk contaminants, and chlorine ensures bacterial safety. However, filtration is increasingly necessary for micro-particles that escape traditional treatment methods. We’re investigating how to enter this space and align it with our broader water treatment business strategy.
Collaboration in the chemicals sector is becoming increasingly commonplace. How do strategic partnerships fit into Chemtrade’s vision for the future?
Strategic partnerships play a critical role, and for Chemtrade, that can mean relationships and collaborations with others all along the supply or production chain. With TSMC, the largest semiconductor manufacturer, we’re working to meet their stringent requirements for ultra-pure acid, which is essential for advanced chip production. Although plans for a joint venture plant in Arizona are on hold due to high construction costs and slower-than-expected demand, we remain ready to proceed when market conditions stabilize.
At our Brandon, Manitoba facility, we are working with an innovative company regarding the hydrogen we produce, a naturally occurring byproduct of our production process.
