Chemicals supply could be damaged

11 July 2007
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12 July 2007 | Paul Snell

The formation of a chemical sector joint venture has been approved, despite fears it may damage competition.

An inquiry by the Competition Commission found the project between chemical firms Kemira GrowHow Oyj and Terra Industries would not stop competition in the large fertilizer supply market, but would affect the supply of carbon dioxide, nitric acid and ammonia.

Kemira and Terra make fertilizer and sell chemicals produced during the manufacturing process. The venture was intended to merge most of the firms' UK businesses.

The commission said for the venture to go ahead Kemira must sell its chemical production business to a buyer capable of competing with the joint venture, to ensure there are still alternative suppliers in the market.

Kemira will have to provide the buyer with long-term agreements to supply them with chemicals, and provide them with contracts, information and key staff.

Mike Bennett, CEO of Terra, said: "We have worked closely with the Competition Commission and expect to satisfy their conditions soon so we can start the joint venture."

SMjul2007

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