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Sterling Chemicals and Monsanto Company Reach Agreement to Reopen Production
Facility, Establishing Supply Agreement for Roundup Production
ST. LOUIS and HOUSTON, Dec. 12 /PRNewswire-FirstCall/ -- Sterling Chemicals,
Inc. (BULLETIN BOARD: SCHI) and Monsanto Company 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. For more information on
Monsanto, see: http://www.monsanto.com/ .
Certain statements contained in this release such as statements concerning the
company's anticipated financial results, current and future product performance,
regulatory approvals, currency impact, business and financial plans and other
non-historical facts are "forward-looking statements." These statements are
based on current expectations and currently available information. However,
since these statements are based on factors that involve risks and
uncertainties, the company's actual performance and results may differ
materially from those described or implied by such forward-looking statements.
Factors that could cause or contribute to such differences include, among
others: increased generic and branded competition for the company's Roundup
herbicide; the success of the company's research and development activities and
the speed with which regulatory authorizations and product launches may be
achieved; domestic and foreign social, legal and political developments,
especially those relating to agricultural products developed through
biotechnology; the company's ability to achieve and maintain protection for our
intellectual property; the company's ability to successfully market new and
existing products in new and existing domestic and international markets; the
effect of weather conditions and commodity markets on the agriculture business;
the company's ability to obtain payment for the products that it sells; the
company's exposure to lawsuits and other liabilities and contingencies,
including those related to intellectual property, regulatory compliance
(including seed quality), adventitious presence of biotechnology traits in
seeds, environmental contamination and antitrust; the company's ability to fund
its short-term financing needs; the accuracy of the company's estimates and
projections, for example, those with respect to product returns and grower use
of its products and related distribution inventory levels; the company's ability
to continue to manage its costs; general economic and business conditions;
political and economic conditions due to threat of future terrorist activity and
related military action; the effects of the company's accounting policies and
changes in generally accepted accounting principles; fluctuations in exchange
rates and other developments related to foreign currencies and economies; and
other risks and factors detailed in the company's filings with the U.S.
Securities and Exchange Commission. Undue reliance should not be placed on these
forward- looking statements, which are current only as of the date of this
report. The company disclaims any current intention to revise or update any
forward- looking statements or any of the factors that may affect actual
results, whether as a result of new information, future events or otherwise.
Statements in this press release that contain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, include, but are
not limited to, statements concerning cost competitiveness and efficiency of
operations. Such statements are inherently subject to a variety of risks and
uncertainties that could cause actual results to differ materially from those
anticipated or projected. A discussion of the risk factors that could impact
these areas and each company's overall business and financial performance can be
found in the companies' filings with the Securities and Exchange Commission.
For Sterling, these factors include, among others, the timing and extent of
changes in commodity prices, the cyclicality of the petrochemicals industry,
petrochemicals industry production capacity and operating rates, market
conditions in the petrochemicals industry, competition, changes in global
economic and business conditions, increases in raw materials costs, Sterling's
ability to obtain raw materials and energy at acceptable prices, in a timely
manner and on acceptable terms, regulatory initiatives and compliance with
governmental regulations, compliance with environmental laws and regulations,
customer preferences and various other matters, many of which are beyond
Sterling's control. Given these concerns, investors and analysts should not
place undue reliance on forward-looking statements. Each forward-looking
statement speaks only as of the date of this press release, and neither company
undertakes any obligation to publicly update or revise any forward-looking
statements. Copies of Sterling's most recent Annual Report on Form 10-K are
posted on, or may be accessed through, Sterling's website at
http://www.sterlingchemicals.com/ .
DATASOURCE: Monsanto Company
CONTACT: Bryan Hurley of Monsanto Company, +1-314-694-8387; or Paul G.
Vanderhoven of Sterling Chemicals, Inc., +1-713-654-3700
Web site: http://www.monsanto.com/
http://www.sterlingchemicals.com/
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