NEWS RELEASE. CHEMTRADE LOGISTICS INCOME FUND REPORTS 2009 THIRD QUARTER RESULTS * * * * Further Improvements Over First and Second Quarters This Year

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1 NEWS RELEASE CHEMTRADE LOGISTICS INCOME FUND REPORTS THIRD QUARTER RESULTS * * * * Further Improvements Over First and Second Quarters This Year TORONTO, November 11, Chemtrade Logistics Income Fund (TSX: CHE.UN) today announced results for the three months and nine months ended. The Fund reported further improvements in operating earnings compared to the first and second quarters of. Demand for most of Chemtrade s products improved in the third quarter, including demand for sulphuric acid, Chemtrade s largest product by volume. Comparing the third quarter results with the second quarter this year, cash flow from operating activities was $18.9 million (Q2 : $6.8 million) and Distributable cash after maintenance capital expenditures for the period was $11.6 million, or $0.38 per unit (Q2 : $11.0 million, or $0.36 per unit), generated from revenue of $127.0 million (Q2 : $124.6 million) and earnings before interest, income taxes, depreciation and amortization (EBITDA) of $21.5 million (Q2 : $17.5 million). Net earnings for the third quarter were $19.5 million (Q2 : $13.6 million). For the nine months ended cash flows from operating activities were $15.8 million (: $53.7 million), and Distributable cash after maintenance capital expenditures was $32.2 million (: $72.0 million), or $1.04 per unit (: $2.14 per unit). EBITDA was $57.3 million (: $94.7 million), and revenue was $413.4 million (: $886.0 million). Net earnings for the first nine months of were $34.4 million (: $42.8 million). Mark Davis, President and Chief Executive Officer of Chemtrade, said, Our ongoing focus on operating efficiencies, diversified customer base and multiple supply sources continue to position us for success. The strength of our business portfolio is evident in our results. Despite lower economic activity this year and a labour disruption at a major supply source, the Fund continues to generate Distributable cash after maintenance capital expenditures comfortably in excess of our distribution rate and maintain its strong balance sheet. Sulphur Products & Performance Chemicals (SPPC) generated revenue of $77.7 million, which was similar to the level of $77.9 million generated in the second quarter of. EBITDA for the third quarter was $21.3 million, compared with $15.2 million in the second quarter of. The improvement over the second quarter reflected higher volumes for most product lines as well as lower distribution and operating costs. EBITDA for the quarter also benefited from insurance recoveries of $3.8 million related to the incident at the Beaumont plant in, compared with recoveries of $2.3 million in the second quarter this year. Pulp Chemicals reported third quarter revenue of $13.8 million compared with $13.2 million in the second quarter of. EBITDA achieved during the third quarter of $4.5 million was also similar to the level achieved during the second quarter of.

2 International reported revenue of $35.5 million for the third quarter, which was slightly higher than the level of $33.5 million reported for the second quarter of. EBITDA for the quarter was $3.2 million on lower volumes versus the $4.9 million earned in the second quarter of. Mr. Davis said, We remain focused on pursuing the right initiatives to ensure long term sustainability of earnings while at the same time positioning ourselves for maximum benefit when demand for our products increases. For example, we recently added new product sources that potentially could create as much as 10% more volume of sulphuric acid than we have traditionally marketed. Despite the economic challenges that we and our customers have been facing in, the nature of our business model, coupled with our strong balance sheet and ample liquidity are more than sufficient to sustain our current distribution rate. Distributions Distributions declared in the third quarter totalled $0.30 per unit, comprised of monthly distributions of $0.10 per unit. This news release contains certain statements which may constitute forward-looking statements within the meaning of certain securities laws, including the safe harbour provisions of the Securities Act (Ontario). The use of any of the words anticipate, continue, estimate, expect, expected, intend, may, will, project, plan, should, believe and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this news release describe the expectations of Chemtrade as of the date of this news release. Our actual results could be materially different from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, we cannot guarantee that any forward-looking statement will materialize. Forward-looking statements do not take into account the effect that transactions or non-recurring items announced or occurring after the statements are made may have on our business. We disclaim any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. This news release contains forward-looking statements about the objectives, strategies, financial condition, results of operations and businesses of the Fund, including, but not limited to: The volume of sulphuric acid that may be available from new sources; and The Fund s ability to sustain its current distribution rate. Financial outlook information contained in this press release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on management s assessment of the relevant information currently available. Readers are cautioned that such financial outlook information contained in this press release should not be used for purposes other than those for which it is disclosed herein. Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities regulatory authorities, available at A conference call to review the third quarter results will be webcast live on and on Thursday, November 12, at 10:00 a.m. For further information: # # # # Mark Davis Rohit Bhardwaj President and CEO Vice-President, Finance and CFO Tel: (416) Tel: (416)

3 CHEMTRADE LOGISTICS INCOME FUND Consolidated Balance Sheets (in thousands of dollars) ASSETS December 31, (unaudited) Current assets Cash and cash equivalents $ 12,887 $ 48,050 Accounts receivable (note 3) 60, ,640 Inventories 20,936 38,124 Prepaid expenses and other assets (notes 8(b) and 10) 6,858 6, , ,073 Notes receivable 2,677 3,045 Property, plant and equipment (note 3) 152, ,174 Other assets 2,414 2,583 Future tax asset 10,233 13,283 Intangibles 114, ,227 Goodwill 91,598 98,840 LIABILITIES AND UNITHOLDERS EQUITY $ 474,808 $ 655,225 Current liabilities Accounts payable $ 34,792 $ 122,685 Accrued and other liabilities (notes 5(f) and 8(b)) 40,118 71,024 Distributions payable 3,067 3,178 Income taxes payable 2,216 8,157 80, ,044 Long-term debt (note 4) 162, ,023 Other long-term liabilities (notes 5(f) and 8(b)) 12,623 12,706 Post-employment benefits 4,002 4,238 Future tax liability 17,646 30,278 Unitholders equity Units (note 5(b)) 377, ,932 Contributed surplus (note 5(c)) 9,720 5,272 Deficit (146,402) (153,141) Accumulated other comprehensive (loss) (note 6) (43,101) (24,127) See accompanying notes to consolidated financial statements 197, ,936 $ 474,808 $ 655,

4 CHEMTRADE LOGISTICS INCOME FUND Consolidated Statements of Earnings (in thousands of dollars, except per unit amounts) (unaudited) Three Months Ended Nine Months Ended Revenue $ 126,989 $ 393,971 $ 413,436 $ 886,037 Cost of sales and services (excluding depreciation disclosed below) (note 3) 95, , , ,990 Gross profit 31,329 47,356 83, ,047 Selling, general, administrative and other costs (note 3) 9,803 5,662 26,453 32,553 Restructuring costs (1,238) Earnings before the under-noted 21,526 41,694 57,262 94,732 Unrealized foreign exchange (gain) loss (6,802) 3,520 (12,046) 4,517 Depreciation and amortization 11,086 9,893 33,523 29,883 Loss (gain) on sale of property, plant and equipment 94 (250) 94 (250) Net interest and accretion expense (note 4) 2,122 3,639 6,567 9,465 Earnings before income taxes 15,026 24,892 29,124 51,117 Income taxes Current 973 2,098 2,805 5,429 Future (5,482) 3,304 (8,110) 2,897 (4,509) 5,402 (5,305) 8,326 Net earnings $ 19,535 $ 19,490 $ 34,429 $ 42,791 Net earnings per unit (note 5(d)) Basic $ 0.64 $ 0.58 $ 1.12 $ 1.27 Diluted $ 0.64 $ 0.58 $ 1.12 $ 1.27 Cost of sales and services for the three months and the nine months ended does not include $5,738 and $16,992 respectively ( - $4,627 and $14,124 respectively) of depreciation relating to plant buildings and equipment. See accompanying notes to consolidated financial statements - 4 -

5 CHEMTRADE LOGISTICS INCOME FUND Consolidated Statements of Changes in Unitholders Equity (in thousands of dollars) (unaudited) Three Months Ended Nine Months Ended Units Balance, beginning of period $ 377,144 $ 412,957 $ 389,932 $ 412,957 Repurchase of units (note 5(c)) - (2,444) (12,788) (2,444) Balance, end of period $ 377,144 $ 410,513 $ 377,144 $ 410,513 Contributed surplus Balance, beginning of period $ 9,720 $ - $ 5,272 $ - Repurchase of units (note 5(c)) , Balance, end of period $ 9,720 $ 275 $ 9,720 $ 275 Deficit Balance, beginning of period $ (156,736) $ (150,415) $ (153,141) $ (154,040) Changes in accounting policies Balance, beginning of period, as adjusted (156,736) (150,415) (153,141) (153,566) Net earnings 19,535 19,490 34,429 42,791 Distributions (9,201) (10,065) (27,690) (30,215) Balance, end of period $ (146,402) $ (140,990) $ (146,402) $ (140,990) Accumulated other comprehensive (loss) (note 6) Balance, beginning of period $ (31,853) $ (50,532) $ (24,127) $ (53,305) Other comprehensive (loss) income (11,248) 5,795 (18,974) 8,568 Balance, end of period $ (43,101) $ (44,737) $ (43,101) $ (44,737) See accompanying notes to consolidated financial statements Consolidated Statements of Comprehensive Income (in thousands of dollars) (unaudited) Three Months Ended Nine Months Ended Net earnings $ 19,535 $ 19,490 $ 34,429 $ 42,791 Change in unrealized loss on translation of selfsustaining foreign operations (11,186) 5,872 (18,630) 9,476 Change in unrealized loss on derivatives designated as cash flow hedges (62) (324) (344) (1,155) Losses on derivatives designated as cash flow hedges in prior periods transferred to net income in the current period Other comprehensive (loss) income (11,248) 5,795 (18,974) 8,568 Comprehensive income $ 8,287 $ 25,285 $ 15,455 $ 51,359 See accompanying notes to consolidated financial statements - 5 -

6 CHEMTRADE LOGISTICS INCOME FUND Consolidated Statements of Cash Flows (in thousands of dollars) (unaudited) Three Months Ended Nine Months Ended Cash provided by (used in): Operating activities: Net earnings $ 19,535 $ 19,490 $ 34,429 $ 42,791 Items not affecting cash: Depreciation and amortization 11,086 9,893 33,523 29,883 Future income taxes (5,482) 3,304 (8,110) 2,897 Accretion expense Loss (gain) on sale of property, plant and equipment 94 (250) 94 (310) Gain on settlement of property damage claim (note 3) (2,671) - (2,671) - Change in fair value of derivatives and unrealized foreign exchange (gain) loss (6,426) 742 (11,236) 4,535 16,276 33,312 46,468 80,316 Decrease (increase) in working capital 2,600 (19,344) (30,710) (26,594) 18,876 13,968 15,758 53,722 Financing activities: Distributions to unitholders (9,201) (10,075) (27,802) (30,225) Repurchase of units (note 5(c)) - (2,169) (8,340) (2,169) (Decrease) in operating line of credit (777) (7,097) - (14,144) Financing transaction costs (628) Increase (decrease) in other long-term liabilities 1, (113) 3,577 (8,814) (18,376) (36,255) (43,589) Investing activities: Additions to property, plant and equipment (4,900) (4,940) (14,980) (11,590) Proceeds from disposal of property, plant and equipment 240 2, ,787 Notes receivable (2,523) (4,660) (2,232) (14,740) (11,326) Effect of exchange rates on cash held in foreign currencies 55 (181) 74 - Increase (decrease) in cash and cash equivalents 5,457 (6,821) (35,163) (1,193) Cash and cash equivalents beginning of period 7,430 17,432 48,050 11,804 Cash and cash equivalents end of period $ 12,887 $ 10,611 $ 12,887 $ 10,611 Supplemental information: Cash taxes paid $ 4,535 $ (82) $ 8,272 $ 1,292 Cash interest paid $ 2,188 $ 3,394 $ 6,800 $ 9,070 See accompanying notes to consolidated financial statements - 6 -

7 CHEMTRADE LOGISTICS INCOME FUND Notes to Consolidated Financial Statements (in thousands of dollars) (unaudited) 1. ORGANIZATION AND DESCRIPTION OF THE BUSINESS: Chemtrade Logistics Income Fund (the Fund ) commenced operations on July 18, 2001 when it completed an Initial Public Offering and purchased various assets and related businesses from Marsulex Inc. The Fund operates in four business segments: Sulphur Products & Performance Chemicals (SPPC), Pulp Chemicals, International and Corporate. For additional information regarding the Fund s business segments see note 7. These interim consolidated financial statements of the Fund have been prepared by management in accordance with accounting principles generally accepted in Canada. These interim consolidated financial statements include the accounts of the Fund and its wholly-owned subsidiaries. Inter-company transactions and balances have been eliminated. These interim consolidated financial statements have been prepared following the same accounting policies and methods of computation as the annual consolidated financial statements of the Fund for the year ended December 31,, except as disclosed in note 2. These interim consolidated financial statements do not contain all disclosures required by generally accepted accounting principles and accordingly should be read in conjunction with the annual consolidated financial statements and the notes thereto. 2. CHANGES IN ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS: (a) (i) Changes in Accounting Policies: Goodwill and intangible assets Effective January 1,, the Fund adopted the recommendations of the Canadian Institute of Chartered Accountants (CICA) Handbook Section 3064, Goodwill and Intangible Assets. Section 3064 states that upon their initial identification, intangible assets are to be recognized as assets if they meet the definition of an intangible asset and if they satisfy the recognition criteria contained in the Handbook section. This section also provides further information on the recognition of internally generated intangible assets (including research and development costs). Section 3064 carries forward the requirements of the old Section 3062, Goodwill and Other Intangible Assets with regards to the subsequent measurement of intangible assets, goodwill, and disclosure. The adoption of this section did not have an impact on the Fund s consolidated financial statements

8 2. CHANGES IN ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (continued): (ii) Fair value of financial assets and financial liabilities Effective January 1,, the Fund adopted the recommendations of EIC-173, entitled Credit Risk and the Fair Value of Financial Assets and Financial Liabilities, which provides further information on the determination of the fair value of financial assets and financial liabilities under Section 3855, entitled Financial Instruments Recognition and Measurement. This EIC states that an entity s own credit and the credit risk of the counter-party should be taken into account in determining the fair value of financial assets and financial liabilities, including derivative instruments. The adoption of this EIC did not have an impact on the Fund s consolidated financial statements. (b) (i) Recent Accounting Pronouncements: Convergence to International Financial Reporting Standards (IFRS) In January 2006, the CICA Accounting Standards Board (AcSB) adopted a strategic plan for the direction of accounting standards in Canada. The AcSB has recently confirmed that accounting standards in Canada for public companies are to converge with IFRS effective for fiscal periods beginning on or after January 1, The Fund has assembled an IFRS transition team which is continuing to assess the impact of the convergence of Canadian GAAP and IFRS, and will implement the new IFRS standards. (ii) Business combinations In January, the CICA issued Handbook Sections 1582, Business Combinations; 1601, Consolidated Financial Statements; and 1602, Non-Controlling Interests. These sections replace Handbook Sections 1581, Business Combinations; and 1600, Consolidated Financial Statements. Section 1582 establishes standards for the accounting for business combinations that is equivalent to the business combination accounting standard under IFRS. Section 1582 is applicable for the Fund s business combinations with acquisition dates on or after January 1, Early adoption of this section is permitted. Sections 1601 and 1602 establish standards for the preparation of consolidated financial statements and for accounting for a non-controlling interest in a subsidiary in the consolidated financial statements subsequent to a business combination. Sections 1601 and 1602 are applicable for the Fund s interim and annual consolidated financial statements for its fiscal year beginning January 1, Early adoption of these sections is also permitted. If the Fund chooses to early adopt any one of these sections, the other two sections must also be adopted at the same time. The Fund is currently evaluating the effect of these new sections on the consolidated financial statements

9 3. INSURANCE CLAIM: During the third quarter of, an incident occurred at the Fund s Beaumont, Texas facility, which resulted in property damage and business interruption. The Fund has settled the property damage and is pursuing the business interruption insurance claim with its insurer. During the second quarter of, the Fund received a prepayment of US$2,500 related to its business interruption claim. The Fund allocated US$500 of this towards a receivable that had been previously recorded and the balance was included in selling, general, administrative and other costs in the SPPC segment. During the fourth quarter of and the first quarter of, the Fund incurred capital expenditures of US$9,839 relating to the repair of damaged property at the Beaumont facility. The Fund has concluded its property damage claim and has recovered most of its capital expenditures relating to the repair. Since the repair costs exceeded the net book value of the damaged assets and because the Fund was reimbursed the repair costs, the Fund recognized a non-cash gain of $2,671 at the conclusion of the claim. This gain was included in selling, general, administrative and other costs in the SPPC segment. The Fund also recovered $1,097 of costs incurred to preserve the assets during the repair process. This recovery was included in cost of sales and services in the SPPC segment where the costs were originally recorded. 4. LONG-TERM DEBT: The interest rate on the Fund s term debt is the aggregate of LIBOR and a margin which varies based on the level of a ratio, as set out in the Fund s credit agreement. During the first quarter of, the Fund entered into new interest rate swap arrangements which fixed the LIBOR component of its interest rate on all of its outstanding term debt until August During the third quarter of, the Fund s weighted average effective interest rate on its term debt was 4.83%. Previously the Fund had interest rate swaps related to its term debt and operating lines of credit, which fixed interest rates until August The Fund collapsed all of these interest rate swaps upon entering into the new interest rate swap arrangements and rolled the related fair value liability of $9,790 into its new interest rate swaps. This value will be amortized on a straight-line basis over the remaining term of the term debt in net interest and accretion expense. 5. UNITS: (a) Authorized: Unlimited number of units

10 5. UNITS (continued): (b) Outstanding: Number of Units Amount Units Balance December 31, 31,710,410 $ 389,932 Units repurchased for cancellation (note 5(c)) (1,039,940) (12,788) Balance 30,670,470 $ 377,144 (c) Normal course issuer bid: From September 23, to September 22,, the Fund purchased an aggregate of 2,912,466 of its units by way of a normal course issuer bid (the Bid ) through the facilities of the Toronto Stock Exchange (TSX). The purchases were made in accordance with the policies and rules of the TSX and units were purchased for cancellation. The prices that the Fund paid for the units purchased were the market price of such units at the time of acquisition. During, the Fund purchased 1,039,940 units at an average per unit price of $8.02 for an aggregate purchase amount of $8,340. This resulted in $12,788 being recorded as a reduction to the value of units and $4,448 being recorded as contributed surplus. During, the Fund purchased 1,872,526 units at an average per unit price of $9.48 for an aggregate purchase amount of $17,753. This resulted in $23,025 being recorded as a reduction to the value of units and $5,272 being recorded as contributed surplus. (d) Net earnings per unit: Net earnings per unit has been calculated on the basis of the weighted average number of units outstanding for the three months and the nine months ended which amounted to 30,670,470 units and 30,868,188 units respectively ( - 33,581,852 units and 33,582,572 units respectively). (e) Distributions: Distributions paid for the three months and the nine months ended were $9,201 and $27,802 respectively ( - $10,075 and $30,225 respectively). All of the Fund s distributions are discretionary

11 5. UNITS (continued): (f) Long-term incentive plan: The Fund operates a Total Return Long-Term Incentive Plan (TR LTIP) which grants cash awards based on achieving total Unitholder return over a performance period. Total Unitholder return consists of changes in unit price and distributions paid to Unitholders. The Fund treats these awards as liabilities with the value of these liabilities being re-measured at each reporting period, based upon changes in the intrinsic value of the awards. Any gains or losses on re-measurement are recorded in the Consolidated Statements of Earnings, provided that the aggregate compensation cost accrued during the performance period is not adjusted below zero. For the three months ended, the Fund recorded an expense of $3,800 ( recovery of $2,242). For the nine months ended, the Fund recorded a total expense of $2,567 ( - $3,765) related to the TR LTIP. As at there was $2,960 included in Accrued and other liabilities and $3,040 included in Other long-term liabilities related to the TR LTIP. As at December 31,, there was $1,661 included in Accrued and other liabilities, and $3,500 included in Other long-term liabilities. 6. OTHER COMPREHENSIVE INCOME (LOSS): The components of accumulated other comprehensive income (loss) as at and other comprehensive income (loss) for the nine months then ended were as follows: Accumulated other comprehensive (loss) Opening balance December 31, Net change Ending balance Opening balance December 31, 2007 Net change Transferred to net income Ending balance Unrealized (loss) gain on translation of selfsustaining foreign operations $ (19,411) $ (18,630) $ (38,041) (1) $ (52,867) $ 9,476 $ - $ (43,391) (1) Loss on derivatives designated as cash flow hedges (4,716) (344) (5,060) (2) (438) (1,155) 247 (1,346) (2) Accumulated other comprehensive (loss) $ (24,127) $ (18,974) $ (43,101) $ (53,305) $ 8,321 $ 247 $ (44,737) (1) (2) Net of income tax expense of $nil ( - $nil). Net of cumulative income tax recovery of $2,666 ( - $898)

12 7. BUSINESS SEGMENTS: The Fund operates in four business segments: Sulphur Products & Performance Chemicals (SPPC), Pulp Chemicals (Pulp), International (Intl.) and Corporate (Corp.). SPPC markets, removes and/or produces merchant and regenerated sulphuric acid, liquid sulphur dioxide, sodium hydrosulphite, elemental sulphur and phosphorous pentasulphide. These products are marketed primarily to North American customers. Pulp produces sodium chlorate and crude tall oil. These products are marketed primarily to Canadian customers. Intl. provides removal and marketing services for elemental sulphur and sulphuric acid. These products are marketed to customers in Europe, the Mediterranean, North Africa, Central and South America, North America, as well as in the Pacific region. Corp. is a non-operating segment that provides centralized services such as treasury, finance, information systems, human resources, legal and risk management

13 7. BUSINESS SEGMENTS (continued): Three Months Ended SPPC Pulp Intl. Corp. Total Revenue from external customers $ 77,737 $ 13,760 $ 35,492 $ - $126,989 Earnings before the under-noted 21,256 4,450 3,160 (7,340) 21,526 Unrealized foreign exchange gain (6,802) (6,802) Depreciation and amortization 8,167 2, ,086 Loss on disposal of property, plant and equipment Net interest and accretion expense 1, (22) - 2,122 Income tax (recovery) expense (5,200) (4,509) Net earnings 16,583 1,654 1,836 (538) 19,535 Total assets 230, , ,962 (185) 474,808 Goodwill 60,898-30,700-91,598 Intangibles 74,385 35,544 4, ,476 Capital expenditures 4, ,900 Three Months Ended SPPC Pulp Intl. Corp. Total Revenue from external customers $164,617 $ 13,994 $215,360 $ - $393,971 Earnings before the under-noted 26,193 5,015 9,368 1,118 41,694 Unrealized foreign exchange loss ,520 3,520 Depreciation and amortization 7,223 2, ,893 (Gain) on disposal of property, plant and equipment (250) (250) Net interest and accretion expense 2,630 1,107 (98) - 3,639 Income tax expense 4,059-1,343-5,402 Net earnings (loss) 12,531 1,613 7,748 (2,402) 19,490 Capital expenditures 2, , ,

14 7. BUSINESS SEGMENTS (continued): Nine Months Ended SPPC Pulp Intl. Corp. Total Revenue from external customers $255,340 $ 38,951 $119,145 $ - $413,436 Earnings before the under-noted 45,622 13,981 11,908 (14,249) 57,262 Unrealized foreign exchange gain (12,046) (12,046) Depreciation and amortization 24,723 7,065 1,735-33,523 Loss on disposal of property, plant and equipment Net interest and accretion expense 5,261 1,396 (90) - 6,567 Income tax (recovery) expense (7,321) - 2,016 - (5,305) Net earnings (loss) 22,959 5,520 8,153 (2,203) 34,429 Total assets 230, , ,962 (185) 474,808 Goodwill 60,898-30,700-91,598 Intangibles 74,385 35,544 4, ,476 Capital expenditures 13, ,980 Nine Months Ended SPPC Pulp Intl. Corp. Total Revenue from external customers $390,492 $ 43,201 $452,344 $ - $886,037 Earnings before the under-noted 69,982 15,277 24,434 (14,961) 94,732 Unrealized foreign exchange loss ,517 4,517 Depreciation and amortization 21,799 6,974 1,110-29,883 (Gain) on disposal of property, plant and equipment (250) (250) Net interest and accretion expense 7,609 2,153 (297) - 9,465 Income tax expense 4,254-4,072-8,326 Net earnings (loss) 36,570 6,150 19,549 (19,478) 42,791 Capital expenditures 6, , ,590 December 31, SPPC Pulp Intl. Corp. Total Total assets $367,677 $ 91,687 $195,128 $ 733 $655,225 Goodwill 66,883-31,957-98,840 Intangibles 91,762 39,597 5, ,

15 7. BUSINESS SEGMENTS (continued): Geographic segments: The Fund operates primarily in Canada, the United States and Europe. Revenue is attributed to customers based on their location. Revenue Three Months Ended Nine Months Ended Canada $ 30,641 $ 40,511 $ 90,824 $ 108,635 U.S. 60, , , ,058 Europe 35, , , ,344 $ 126,989 $ 393,971 $ 413,436 $ 886,037 Property, Plant and Equipment, Goodwill and Intangibles December 31, Canada $ 112,934 $ 122,318 U.S. 201, ,540 Europe 43,822 48,383 $ 358,341 $ 405,241 There were no producers from which the Fund obtained product that accounted for more than 10% of the Fund s total revenue for the nine months ended. For the nine months ended, the Fund obtained product from a producer that accounted for 11.7% of the Fund s total revenue. For the nine months ended, revenue from a customer accounted for 10.7% of the Fund s total revenue. There were no customers that accounted for more than 10% of the Fund s total revenue for the nine months ended. 8. FINANCIAL INSTRUMENTS: (a) Fair values of financial instruments: Fair value is the value that would be agreed upon in an arm s length transaction between willing and knowledgeable counter-parties. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued and other liabilities and distributions payable approximate their fair values because of the short-term maturity of these financial instruments. The carrying amount of long-term debt, excluding transaction costs, approximates fair value as the debt accrues interest at prevailing market rates

16 8. FINANCIAL INSTRUMENTS (continued): (b) Derivatives and hedging: The Fund has entered into swap arrangements with its principal banker, which fix the LIBOR component of its interest rates on all of its outstanding term debt. In the first quarter of, the Fund entered into new swap arrangements which fixed the LIBOR component of its interest rates on all of its term debt until August Previously the Fund had interest rate swaps related to its term debt and operating lines of credit, which fixed the LIBOR component of its interest rate until August The Fund collapsed all of these interest rate swaps upon entering into the new swap arrangements. Losses are included in accrued and other liabilities and other long-term liabilities with the offset included in other comprehensive income, except for the amortization of the fair value liability of the interest rate swaps entered into during the first quarter of as discussed in note 4 which is included in net interest and accretion expense. Summarized information related to the interest rate swaps is as follows: Hedged Item Notional Amount Maturity Date Weighted Average Effective Interest Rate Fair Value Loss Fair Value Loss December 31, U.S. dollar term debt US$153,138 August % $7,858 (US$7,339) $7,861 (US$6,454) U.S. dollar operating lines of credit N/A N/A N/A $ - $1,247 (US$1,024) The Fund has entered into foreign exchange contracts to manage its exposure to foreign currencies. The Fund buys and sells specific amounts of currencies at pre-determined dates and exchange rates, which are matched with the anticipated operational cash flows. Contracts in place at include future contracts to sell US$1,500, US$8,407, US$635, C$8,233 and 688, at weighted average exchange rates of C$1.18, 0.79, CHF 1.18, 0.60 and US$1.46, respectively, for periods through to May There are unrealized losses of $481 (December 31, - $215) and unrealized gains of $1,645 (December 31, - $1,029) from these contracts at. Gains are included in prepaid expenses and other assets, and losses are included in accrued and other liabilities with the offset included in unrealized foreign exchange loss relating to the fair value of the derivatives. To manage its exposure to changes in the price of natural gas, the Fund has entered into natural gas forward contracts. The Fund sells specific quantities of natural gas at predetermined dates on indices, which are matched with the anticipated operational cash flows. There is a net unrealized gain of $295 (December 31, - $1,175) from these forward contracts at. Losses are included in accrued and other liabilities and gains are included in prepaid expenses and other assets with the offset included in selling, general, administrative and other costs

17 8. FINANCIAL INSTRUMENTS (continued): The Fund s International business segment has commitments to buy and sell commodities and has entered into commodity forward contracts to manage its exposure to commodity price changes. The commitments to buy and sell commodities and the commodity forward contracts are treated as derivatives and are measured at fair value. At and December 31,, the net unrealized value of these transactions is not significant. 9. COMPARATIVE FIGURES: Certain comparative figures have been re-classified in order to comply with the current period s presentation. 10. SUBSEQUENT EVENT: Subsequent to, the Fund entered into an agreement to purchase the outstanding shares of Alliance Specialty Chemicals, Inc. for US$5,623. Prior to, the Fund paid a refundable deposit of US$2,000, which has been included in Prepaid expenses and other assets

18 CHEMTRADE LOGISTICS INCOME FUND MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, The information in this Management s Discussion and Analysis, or MD&A, is intended to assist the reader in the understanding and assessment of the trends and significant changes in the results of operations and financial condition of Chemtrade Logistics Income Fund. Throughout this MD&A, the term the Fund refers to Chemtrade Logistics Income Fund and its consolidated subsidiaries. The terms we, us or our similarly refers to the Fund. This MD&A should be read in conjunction with the unaudited consolidated statements of the Fund for the nine month period ended and the annual MD&A for the year ended December 31,. The Fund s financial statements are prepared in accordance with accounting principles generally accepted in Canada, or Canadian GAAP. The Fund s reporting currency is the Canadian dollar. In this MD&A per unit amounts are calculated using the weighted average number of units outstanding for the applicable period unless otherwise indicated. This MD&A contains certain statements which may constitute forward-looking statements within the meaning of certain securities laws, including the safe harbour provisions of the Securities Act (Ontario). The use of any of the words anticipate, continue, estimate, expect, expected, intend, may, will, project, plan, should, believe and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this MD&A describes the expectations of the Fund as of the date of this MD&A. The Fund s actual results could be materially different from its expectations if known or unknown risks affect its business, or if its estimates or assumptions turn out to be inaccurate. As a result, the Fund cannot guarantee that any forward-looking statement will materialize. Forward-looking statements do not take into account the effect that transactions or non-recurring items announced or occurring after the statements are made may have on the Fund s business. The Fund disclaims any intention or obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. This MD&A contains forward-looking statements about the objectives, strategies, financial condition, results of operations and businesses of the Fund including, but not limited to (capitalized terms are as defined in the MD&A): all of the risks identified in RISKS AND UNCERTAINTIES section; all of the forward-looking statements in the OUTLOOK section; the amount of any TR LTIP payouts;

19 the ability to recover amounts from the Fund s insurers in respect of the Beaumont Incident and the quantum of any such recovery; the ability to comply with the new emission limits imposed by the EPA and the expected cost of compliance; the estimated impact of the Canadian/U.S. dollar exchange rate on the Fund s business; the anticipated tax characterization of planned distributions; the Fund s ability to renew its term debt at maturity; the implementation of planned maintenance capital expenditures, as well as the cost and timing thereof; the use and sufficiency of cash flows from operating activities; the potential non-performance of suppliers or customers of the Fund s International Business and the resulting effect on results; and the potential impact of recent accounting pronouncements, including the timing of the implementation of various steps in connection with the transition to IFRS. Financial outlook information contained in the MD&A about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on management s assessment of the relevant information currently available. Readers are cautioned that such financial outlook information contained in this MD&A should not be used for purposes other than those for which it is disclosed herein

20 FINANCIAL HIGHLIGHTS Three Months Ended Nine Months Ended ($ 000 except per unit amounts) Revenue $ 126,989 $ 393,971 $ 413,436 $ 886,037 Net earnings $ 19,535 $ 19,490 $ 34,429 $ 42,791 Net earnings per unit - Basic $ 0.64 $ 0.58 $ 1.12 $ Diluted $ 0.64 $ 0.58 $ 1.12 $ 1.27 Total assets $ 474,808 $ 656,079 $ 474,808 $ 656,079 Long-term debt $ 162,983 $ 161,489 $ 162,983 $ 161,489 EBITDA (3) $ 21,526 $ 41,694 $ 57,262 $ 94,732 EBITDA per unit (1) $ 0.70 $ 1.24 $ 1.86 $ 2.82 Cash flows from operating activities $ 18,876 $ 13,968 $ 15,758 $ 53,722 Cash flows from operating activities per unit (1) $ 0.62 $ 0.42 $ 0.51 $ 1.60 Adjusted cash flows from operating activities (3) $ 16,332 $ 33,131 $ 46,542 $ 80,376 Adjusted cash flows from operating activities per unit (1)(3) $ 0.53 $ 0.99 $ 1.51 $ 2.39 Distributable cash after maintenance capital expenditures (3) $ 11,606 $ 29,995 $ 32,222 $ 71,998 Distributable cash after maintenance capital expenditures per unit (1)(3) $ 0.38 $ 0.89 $ 1.04 $ 2.14 Distributions declared $ 9,201 $ 10,065 $ 27,690 $ 30,215 Distributions declared per unit (2) $ 0.30 $ 0.30 $ 0.90 $ 0.90 Distributions paid $ 9,201 $ 10,075 $ 27,802 $ 30,225 Distributions paid per unit (2) $ 0.30 $ 0.30 $ 0.90 $ 0.90 (1) (2) Based on weighted average number of units outstanding for the period of: 30,670,470 33,581,852 30,868,188 33,582,572 Based on actual number of units outstanding on record date. (3) See NON-GAAP MEASURES

21 NON-GAAP MEASURES EBITDA - Throughout this MD&A, the term EBITDA is used to describe earnings before any deduction for net interest and accretion expense, taxes, depreciation and amortization and other non-cash charges such as unrealized foreign exchange (gain) loss. EBITDA is a metric used by many investors and analysts to compare organizations on the basis of ability to generate cash from operations. Management considers EBITDA (as defined) to be an indirect measure of operating cash flow, which is a significant indicator of the success of any business. EBITDA is not intended to be representative of cash flow from operations or results of operations determined in accordance with Canadian generally accepted accounting principles (GAAP) or cash available for distribution. EBITDA is not a recognized measure under Canadian GAAP. The Fund s method of calculating EBITDA may differ from methods used by other income trusts or companies, and accordingly may not be comparable to similar measures presented by other organizations. A reconciliation of EBITDA to net earnings follows: Three Months Ended Nine Months Ended ($ 000) Net earnings $ 19,535 $ 19,490 $ 34,429 $ 42,791 Add: Unrealized foreign exchange (gain) loss (6,802) 3,520 (12,046) 4,517 Depreciation and amortization 11,086 9,893 33,523 29,883 Loss (gain) on disposal of property, plant and equipment 94 (250) 94 (250) Net interest and accretion expense 2,122 3,639 6,567 9,465 Net taxes (4,509) 5,402 (5,305) 8,326 EBITDA (1) $ 21,526 $ 41,694 $ 57,262 $ 94,732 (1) EBITDA for the three months and the nine months ended includes recoveries of $nil and $nil respectively ( - recoveries of $nil and $1,238 respectively) for restructuring. Cash Flow - The following table is derived from, and should be read in conjunction with, the consolidated statement of cash flows. Management believes this supplementary disclosure provides useful additional information related to the cash flows of the Fund including the amount of cash available for distribution to Unitholders, repayment of debt and other investing activities. Certain sub-totals presented within the cash flows table

22 below, such as Adjusted cash flows from operating activities, Distributable cash after maintenance capital expenditure and Distributable cash after all capital expenditure, are not defined terms under Canadian GAAP. These sub-totals are used by management as measures of internal performance and as a supplement to the consolidated statement of cash flows. Investors are cautioned that these measures should not be construed as an alternative to using net income as a measure of profitability or as an alternative to the GAAP consolidated statement of cash flows. Further, the Fund s method of calculating each measure may not be comparable to calculations used by other income trusts bearing the same description. Three Months Ended Nine Months Ended ($'000) Cash flows from operating activities $ 18,876 $ 13,968 $ 15,758 $ 53,722 Add (deduct): Changes in non-cash working capital and other items (2,544) 19,163 30,784 26,654 Adjusted cash flows from operating activities 16,332 33,131 46,542 80,376 Less: Maintenance capital expenditure 4,726 3,136 14,320 8,378 Distributable cash after maintenance capital expenditure 11,606 29,995 32,222 71,998 Less: Non-maintenance capital expenditure (1) 174 1, ,212 Distributable cash after all capital expenditure 11,432 28,191 31,562 68,786 (1) Non-maintenance capital expenditures are either pre-funded, usually as part of a significant acquisition and related financing or are considered to expand the capacity of the Fund's operations. CONSOLIDATED OPERATING RESULTS Consolidated revenue for the third quarter of was $127.0 million, compared with consolidated revenue of $394.0 million recorded in the third quarter of. Consolidated revenue for the first nine months of and were $413.4 million and $886.0 million respectively. The main reason for the decline was lower prices for sulphur and sulphuric acid in the International and SPPC segments. Additionally, most product lines experienced lower volumes owing to a general reduction in demand, driven by the global economic conditions prevalent through most of

23 The Fund s net earnings and EBITDA for the third quarter of were $19.5 million and $21.5 million respectively compared with net earnings and EBITDA for the third quarter of of $19.5 million and $41.7 million, respectively. Net earnings and EBITDA for the first nine months of were $34.4 million and $57.3 million respectively. Comparable net earnings and EBITDA for the first nine months of were $42.8 million and $94.7 million respectively. EBITDA for the quarter and nine months ended was lower than the same period of due to significantly lower results in SPPC and International. For the quarter, the reduction in EBITDA was exacerbated by higher Corporate costs, as described in the Corporate segment below. Finally, net earnings in did not show the same decline as EBITDA, because they benefited from significant unrealized foreign exchange gains. RESULTS OF OPERATIONS BY BUSINESS SEGMENT SPPC Three Months Ended Nine Months Ended ($ 000) Revenue $ 77,737 $ 164,617 $ 255,340 $ 390,492 Earnings before the under-noted (EBITDA) 21,256 26,193 45,622 69,982 Depreciation and amortization 8,167 7,223 24,723 21,799 Gain on disposal of property - (250) - (250) Net interest and accretion expense 1,706 2,630 5,261 7,609 Income tax (recovery) expense (5,200) 4,059 (7,321) 4,254 Net earnings $ 16,583 $ 12,531 $ 22,959 $ 36,750 SPPC manufactures and distributes sulphuric acid and other sulphur-based products to an extensive customer base in Canada and the U.S., and provides acid regeneration services to the petroleum industry, primarily in the U.S. Gulf Coast area. SPPC also supplies liquid and powder sodium hydrosulphite, which is sold to the pulp and paper industry and to a lesser extent, to the textile industry. For the third quarter of, SPPC generated revenue of $77.7 million, compared with revenue of $164.6 million for the third quarter of. On a year-to-date basis, revenues declined by $135.2 million from the levels achieved in. The main reason for the decline in revenue was lower realized pricing for sulphur and sulphuric acid. Additionally, sales volumes for most products in were lower than, reflecting weaker demand. Results were also negatively impacted by lower margins realized on sulphuric acid, as market conditions in were less buoyant than in. third quarter results include an insurance recovery of $3.8 million with respect to the conclusion of the Fund s property damage claim relating to the incident at the Beaumont plant in (more fully described in the

24 BEAUMONT INCIDENT section). The Fund is also pursuing a business interruption claim with respect to this incident and during the second quarter of the Fund recorded a recovery of $2.3 million, which represented an interim payment. That claim is ongoing and it is difficult to estimate the amount of the ultimate recovery. Depreciation and amortization for the first nine months of were higher than the same period of due to capital additions. Net interest expenses were lower in the first nine months of due mainly to lower usage of operating lines of credit. Finally, results for were positively impacted by the recording of a recovery of $1.2 million, related to the cessation of production of powder SHS (as described in the RESTRUCTURING section below). Pulp Chemicals Three Months Ended Nine Months Ended ($ 000) Revenue $ 13,760 $ 13,994 $ 38,951 $ 43,201 Earnings before the under-noted (EBITDA) 4,450 5,015 13,981 15,277 Depreciation and amortization 2,358 2,295 7,065 6,974 Net interest and accretion expense 438 1,107 1,396 2,153 Net earnings $ 1,654 $ 1,613 $ 5,520 $ 6,150 Pulp Chemicals produces sodium chlorate and crude tall oil (CTO), both of which are chemicals used in the pulp and paper industry. Sodium chlorate is used to bleach pulp and CTO is used as a less expensive alternative energy source to natural gas. Third quarter Pulp Chemicals revenue was similar to the level achieved during the same period in. EBITDA for the third quarter of was lower than mainly due to an increase in the allowance for doubtful accounts. Revenue during the first nine months of was $4.2 million lower than the same period of, mainly due to reduced demand for sodium chlorate. On a year-to-date basis, the negative impact of the reduced volume in was partially offset by lower costs, resulting in EBITDA and net earnings in being lower than by approximately $1.3 million and $0.6 million, respectively

25 International Three Months Ended Nine Months Ended ($ 000) Revenue $ 35,492 $ 215,360 $ 119,145 $ 452,344 Earnings before the under-noted (EBITDA) 3,160 9,368 11,908 24,434 Depreciation and amortization ,735 1,110 Loss on disposal of property, plant and equipment Net interest income (22) (98) (90) (297) Income tax expense 691 1,343 2,016 4,072 Net earnings $ 1,836 $ 7,748 $ 8,153 $ 19,549 International provides removal and marketing services for elemental sulphur and sulphuric acid. These products are marketed to customers globally. Revenue for the third quarter and first nine months of were substantially lower than the same periods of. This was mainly due to lower prices for sulphur and sulphuric acid, reflecting reduced global demand for these commodities. This decline resulted in lower net earnings and EBITDA in relative to. Also, during, certain product that was not committed to specific customers resulted in extremely high margins due to the high market prices then prevailing. Corporate Three Months Ended Nine Months Ended ($ 000) Cost of services (recoveries) $ 7,340 $ (1,118) $ 14,249 $ 14,961 Loss before the under-noted (EBITDA) (7,340) 1,118 (14,249) (14,961) Unrealized foreign exchange (gain) loss (6,802) 3,520 (12,046) 4,517 Net earnings (loss) $ (538) $ (2,402) $ (2,203) $ (19,478) The Corporate segment includes the administrative costs of corporate activities which are not directly allocable to an operating segment, such as treasury, finance, information technology, human resources, legal and risk management

26 For the third quarter of, corporate costs, excluding unrealized foreign exchange gains were $8.5 million higher than the third quarter of. The main reason for the higher expense in was an accrual of $3.8 million with respect to the Fund s Total Return Long-Term Incentive Plan (TR LTIP), compared with a net reversal of $2.2 million in the third quarter of. Also, during the third quarter of, there were unrealized losses on natural gas swaps of $0.4 million, whereas during the same quarter of, there were unrealized gains of $3.1 million. The impact of these two items was partially offset by higher realized foreign exchange gains during the third quarter of relative to the third quarter of, of $0.9 million. For the first nine months of, the main reason for the $0.7 million reduction in corporate costs relative to the first nine months of was the Fund s TR LTIP. During the first nine months of, TR LTIP accruals were $1.2 million lower than the same period of. During the first nine months of, unrealized losses on natural gas swaps were $0.9 million higher than, which was almost fully offset by higher realized foreign exchange gains of $0.8 million. The comments on TR LTIP expenses relate to the 2007, and TR LTIP. Awards under the 2007, and TR LTIP are payable at the beginning of 2010, 2011 and 2012 respectively. At the end of the third quarter of, $6.0 million has been accrued with respect to these Plans, although the actual payouts will be based upon Total Return, as described in the Fund s Management Information Circular, achieved over the three-year performance periods of each Plan. The nature of this calculation makes it difficult to forecast the amount of TR LTIP expenses that will be recordable in any period as it is based upon future distributions and changes in unit value. The Corporate segment includes large unrealized foreign exchange gains on the translation of U.S. dollar denominated debt, which were a result of the sharp appreciation in the Canadian dollar relative to the U.S. dollar during the third quarter of. This exchange rate fluctuation also resulted in large unrealized foreign exchange losses on the translation of U.S. dollar denominated assets. However, in accordance with accounting rules, those losses are required to be shown in the Consolidated Statements of Comprehensive Income rather than in the Consolidated Statements of Earnings. RESTRUCTURING During the fourth quarter of 2006, the Fund decided to discontinue production of powder SHS and costs of $2.7 million related to that decision were recorded in that quarter. These costs included a provision for a penalty on a long-term supply agreement. During, the penalty was waived. As a result, the Fund reversed the penalty provision previously recorded of $1.2 million