Fearful that a proposed chemical plant near Montreal would undercut its Baltimore factory, Vista Chemical Co. asked U.S. trade officials yesterday to block possible Canadian subsidies to the proposed factory.
Vista, a Houston-based chemical company, is the largest producer of linear alkylbenzene (LAB), an essential ingredient of household detergents and industrial cleaning products.
The company's Baltimore plant on Fairfield Road employs 180 people and produces about 300 million pounds of LAB a year. Another Vista plant in Lake Charles, La., with 50 workers, makes about 200 million pounds of the chemical each year.
Vista argued that its market would be threatened by an LAB factory planned by Societe Generale de financement du Quebec (SGF) and Petroquimica Espanola S.A. (Petresa).
"It really seems to be targeted at the Baltimore factory, more than any other plant," said Bruce E. A. Larsen, president of the Vista's surfactants and specialties division.
The company is concerned that SGF, which is owned by the Quebec government, would receive government subsidies and that the LAB made at the Montreal plant would be sold at below-market prices. "They have a history of not being concerned about profitability," Mr. Larsen said of SGF.
SGF will own about 49 percent of the plant and Petresa, a private Spanish company, will own the rest, according to Vista officials. Representatives of SGF could not be reached yesterday.
Construction of the Montreal plant, which would be able to produce 220 million pounds of LAB annually, is expected to start this summer, according to Mike Reynolds, a spokesman for Vista.
Trying to head off this possible threat, Vista has asked the office of the U.S. Trade Representative to get an agreement from the Canadian government not to subsidize the new operation. This could be done through the Binational Subsidies Working Group, a group set up under the U.S.-Canadian Free Trade Agreement of 1988, Mr. Reynolds said.
After a 35-minute meeting yesterday, Deputy Trade Representative Rufus Yerxa said he would look into reconvening the subsidy working group, Mr. Larsen said.
Mr. Larsen also presented Mr. Yerxa with a $25,000 study by the consulting company of Arthur D. Little Inc. that concludes the Montreal plant would have a very low or negative return on investment.