Home / News Draslovka in talks to expand Memphis plant with new caustic soda production facility

News 12/11/2023
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Draslovka a.s. (“Draslovka” or the “Company”), a leading speciality chemical products and services company, announces it is in advanced discussions with technology-driven producers of caustic and chlor-alkali derivatives, including Spolchemie and several other international businesses. Draslovka seeks to partner with a producer and build a production facility at the Company’s existing site in Memphis, Tennessee using existing plant infrastructure. The facility will apply the latest global production technologies to capture sustainability and economic benefits for all stakeholders.

Caustic soda is used in the production of Glycine Leaching Technology (“GLT”), Draslovka’s proprietary innovative leaching solution that offers substantive cost and sustainability benefits in the process of leaching metals from certain ores (including gold, nickel, cobalt and copper). Caustic soda is also used to produce Sodium Cyanide, the company’s market-leading product that is used by the majority of the gold industry for processing. 

By building and operating a caustic soda facility in partnership with an internationally recognised specialist partner in the chlor-alkali value chain, Draslovka seeks to produce caustic soda in the most financially and energy-efficient manner to secure significant sustainability benefits compared to a number of current legacy producers. As the market dynamics of caustic soda pricing can be volatile and US-sourced caustic soda is significantly more expensive than caustic soda from Asia and Australia, the move will allow Draslovka to significantly reduce its costs and improve competitive power. Own production will also give the Company enhanced control of its supply chain.

The concrete discussions with partners on expanding into caustic soda production and the chlor-alkali value chain are in line with Draslovka’s strategy of expansion and investment in sustainable processes and solutions. The Memphis plant produces the majority of Draslovka’s mining solutions products and near-term production of GLT is being considered. 

Pavel Bruzek, Chief Executive Officer of Draslovka, commented: “These discussions are in line with our strategy of offering high-quality, cost-effective and sustainable mining solutions to our valued customers. We always strive to find the most economic supply of ingredients hence we have begun discussions with several caustic soda manufacturers to partner and produce this integral ingredient. Own production will be a buffer against the macro factors of today, such as geopolitics, inflation and supply chain bottlenecks as well as the fundamental disconnect between the US and the rest of the world’s caustic soda pricing. Our clients will have peace of mind they are accessing the full range of our Sodium Cyanide, GLT solutions and other mining products in a timely manner and at advantageous market prices.”

James Stockbridge, Director of Mining Process Solutions, Draslovka said: “I am excited that the Memphis plant is being considered for the expansion into the production of caustic soda. Caustic soda price in the US is creating major headwinds to our competitive power in the international markets.  Draslovka has invested heavily in the technology and process improvement at the Memphis facility since acquiring it in 2021 and we are committed to the area and our community in Memphis.  We have a proud history and expertise, and the additional new facilities will allow us to expand our pool of local staff and affirm our leading position in the local business community.”

Caustic Soda Market 

The global caustic soda market presents an attractive opportunity for Draslovka as it is expected to grow at a CAGR of 5.78% between 2023 and 2028 due to demand across various industries, including chemicals and mining. Caustic soda prices are volatile and vary across geographies with the cost in the US approximately twice that in Australia or Asia despite comparatively low input costs. The continuous disconnect in the caustic soda price index between the USA and the rest of the world is decreasing the competitiveness of the US industry in most caustic soda derivatives at the global markets. Global caustic soda capacity is expected to grow considerably over the next five years however this will be predominantly in Asia and Middle East, with no new plants and minimal expansion of current plants expected in North America. As such, caustic soda prices in the US may increase further, creating major headwinds to companies and sectors that use it.

About Draslovka

Draslovka a.s. (Draslovka) is a global leader in cyanide-based chemical specialties and agricultural chemicals including next-generation fumigants and biocides. Utilising the company’s significant expertise, Draslovka develops and scales solutions which are vital for delivering sustainable growth at pace. A private holding company based in the Czech Republic, it is owned by four Czech families and has more than 100 years of experience in hydrogen cyanide (HCN) production and HCN chemistry. The company specializes in the production of fully synthetic and highly purified liquid HCN, which undergoes further processing for application in a variety of downstream products ranging from the mining to agriculture sectors. Through its scalable chemistry-based solutions, Draslovka aims to unlock transformation and be the leading global player in the production of cyanides for use in synthesis, mining, and industrial and agricultural applications, with safety and environmental sustainability at the heart of all its operations.

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