Speciality chemicals company Zirax will increase chloride pellet capacity 60 per cent through an agreement with the multinational Solvay group.

AIM-quoted Zirax, which is run by Russian chief executive Valery Androsov and chaired by ex-Lord Mayor of London Sir Michael Oliver, has agreed to take two thirds of the pellets, known as CaC12, from a new plant being developed by Brussels-based Solvay at Rosignano in Italy. Already world Number Two in specialist process chemicals for oil and gas exploration wells, Zirax will use the Solvay CaC12 to supply unsatisfied demand from oil and gas producers in Africa and the Middle East.

Androsov, who has known Solvay for at least 15 years, believes Zirax will be able to achieve the same margins on its Solvay-sourced material as from Russia, because higher pellet costs will be offset by lower transport costs. Advisers also suggest that having a source in the European Union could be useful if world trade talks turn even more sour.

Zirax, which raised �6 million with its AIM float in December, also makes environmentally friendly de-icing products for the City of Moscow and other clients and is also expanding its Russian production facility at Volgagrad by 30 per cent. The company nearly doubled operating profits to �1.6 million last year on �11.4 million revenues, but float costs depressed the pre-tax figure to �945,000.

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