Canexus has a proven track record of growth and a strong portfolio of opportunities.
Our investments position us to take advantage of market fundamentals, sustain our low-cost advantages and help us expand into other growth opportunities.
Growing Cash Operating Profit
When we make investment decisions, our goal is to increase cash operating profit while maintaining a strong balance sheet. We use our balance sheet to finance the right opportunities where we can de-lever quickly.
Our history speaks for itself. In 2010, we undertook six growth projects, the largest of which was a technology conversion project at our North Vancouver chlor-alkali plant, which made us the regional low-cost leader.
We also expanded capacity at Brandon by over 12% in 2008 and, over the years, have almost doubled our chlorate capacity in Brazil. Each time, we’ve been able to de-lever quickly and return to our target debt-to-EBITDA ratio, including convertible debentures, of 2.5 to 3 times.
Driving Future Growth
We continue to drive forward with growth projects. At our North Vancouver facilities, two hydrochloric acid expansions are each expected to add 110,000 wet metric tonnes (WMT) of capacity, increasing our total hydrochloric acid capacity to 370,000 WMT per year.
At NATO, we are expanding our Bruderheim terminal in two stages: 1) increasing our diluted bitumen and crude oil truck-to-rail transloading and 2) adding a pipeline-connected unit train operation. We also have opportunities for further expansion on this 480-acre site.
As the pie charts show, our recent investments are shifting the relative balance of our segmented cash operating profit. By 2015, NATO could be contributing up to 25%. Even with these investments, our financial and liquidity ratios are expected to be acceptable and we anticipate being able to de-lever quickly given the attractiveness of these projects. We will also continue to evaluate other growth opportunities that build on our low-cost advantages and offer the following criteria:
- Critical mass
- Higher growth potential.