HOUSTON, Nov. 15, 2001 (PRIMEZONE) -- KMG Chemicals, Inc. (Nasdaq:KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that its MSMA plant in Matamoros, Mexico is completing final tests and is expected to begin commercial production in late November, 2001. The herbicide MSMA, or monosodium methanearsonate, protects cotton crops from undesirable weed and grass growth. It will be marketed under the trade names Bueno(r) 6 and Ansar(r) 6.6, primarily to the cotton-growing regions of the southern states and California.
KMG purchased the plant in October 2000 from GB Biosciences Corporation, an affiliate of Zeneca Ag Products Inc. It was relocated and reconstructed on the Matamoros site, on schedule and within budget. Worldwide pesticide registrations and trademarks were included in the acquisition.
The company will begin producing MSMA in commercial quantities shortly, in anticipation of the spring 2002 planting season. Wholesale product will be supplied to distribution points in Georgia, South Carolina, Mississippi, California and Texas, and will continue to be packaged in the familiar 2.5-gallon containers. MSMA inventory for 2001 sales had been provided under a tolling agreement with the seller.
David Hatcher, chief executive officer and president of KMG Chemicals, said, "Our strategy is to be a very efficient and low-cost producer of quality product. We are the only North American plant producing MSMA and expect to be a major player in the market. Our domestic MSMA sales are projected to be in the $6 million range. Additionally, we expect to become more active in the international MSMA market during 2002, and are currently transferring product registrations in other countries to our name.
"We consider this profitable plant acquisition an unqualified success and a tangible validation of our business model. In keeping with our key strategic initiative of growing and diversifying our revenue stream," Hatcher added, "We have already accelerated our search for other niche-market agricultural and industrial chemicals. We are screening many more deals now and the acquisition environment has improved. Our strong balance sheet and cash position gives us a definite leg up in our hunt for additional accretive acquisitions. With this in mind, we can confidently say that KMG Chemicals is poised for further growth."
KMG Chemicals, Inc., through its subsidiaries, produces and distributes specialty chemicals to carefully focused markets. The company grows by acquiring and managing stable chemical product lines and businesses with established production processes. Its wholly owned subsidiary, KMG Bernuth, Inc. is a global provider of wood preservation chemicals to the lumber treatment industry and herbicides to the agricultural industry. For more information, visit the company's Web site at www.kmgchemicals.com.
The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements as to the future performance of the company. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development acceptance, the impact of competitive services and pricing and general economic risks and uncertainties.