In accordance with local laws and practices, ownership will be transferred at first to the new joint venture company established by Pigment and Kemira. Following the transfer of permits and licenses, the entire holding in the joint venture company will be transferred to Kemira. It is likely that the permit transfer process will be completed by the end of the year.

Water treatment in St. Petersburg is a significant development step for Kemira; after all, the company has researched and offered total solutions for Russian drinking water and wastewater treatment since the 1980s. "This agreement is a follow-up to Kemira’s exports of water treatment chemicals to Russia, which began in the 1990s. The plant’s current output goes for the treatment of drinking water, and in future Kemira will provide products not only to St. Petersburg, but also for the development of the drinking water and waste water supply in northwestern Russia. The development of the water supply in Russia provides great opportunities for Kemira and, in future, closer cooperation with Russians will lead to brisk business growth," says Vice President Hannu Luhtala, assessing the outlook for Kemira’s Kemwater unit.

The Russian company Pigment produces both solid and liquid aluminium sulphate in St. Petersburg. Its major customer is GUP Vodokanal Sankt Peterburga, the city's waterworks. Kemira will start up the planning of the new production facility for the St. Petersburg plant immediately, with the aim of almost doubling the plant’s present production. It is estimated that production in the new facility will start up in the latter half of 2003.

At the new production facility, the raw material Kemira will use is the ferrous sulphate produced as a co-product at the titanium dioxide pigment plant in Pori, Finland. Ferrous sulphate is used to make highly-refined water treatment chemicals. In addition, Nordic know-how and total synergy can be tapped into in the water supply of northwestern Russia such that the sludge created during drinking water treatment is reused efficiently in the treatment of wastewater.

The agreement that has now been signed strengthens Kemira’s position in the water chemical market of the Baltic basin. One of the most strategic core business areas of the Kemira Group is to expand its business operations in water treatment chemicals. At present, the company is already the largest supplier of coagulants in Europe.

Kemira Chemicals Oy
Yrjö Sipilä, President Tel. 358 (0)10 862 1605

Kemwater Unit
Lennart Johansson,
Executive Vice President Tel. +46 42 171 000
Hannu Luhtala, Tel. +358 (0)10 8611
Vice President