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While most finance wonks opine that dominant indices will need to double bottom (at the very least) before a secular, bull rally can take form, many also agree that the first-mover advantage in such a global rally will start in both commodities and emerging markets.

One such firm could be Sociedad Quimica y Minera de Chile (NYSE:SQM), a Chilean chemical manufacturer that deals in specialty fertilizers (its principal revenue source), iodine and iodine derivatives (used to produce polarizing film for LCD screens and contrast media), lithium and lithium derivatives (vital to the production of rechargeable batteries powering modern electronics and hybrid cars worldwide), potassium nitrate (to make glass or enamel coatings for refrigerators and bathtubs), and industrial chemicals.

SQM thus taps into two growing industries–agriculture and “green” technology. A report issued last month noted that:

Chile is the leading lithium producer in the world with SQM being the word leader with a 30% market share. The company has nine plants in the Salar de Atacama, which is considered the driest place on earth and holds the highest lithium concentrations currently recorded. Bolivia is estimated to have about half the world’s proven lithium reserves. Bolivia, however, lacks the expertise and infrastructure to compete with Chile and Argentina, which together account for more than half the world’s 27,400 tons of annual lithium production.

In February SQM announced 4Q08 net income increase of 170% year-on-year to US$120mn, while revenues climbed 29.9% year-over-year in the recent period to US$398mn. That said, the firm admitted that it expects 2009 to be a tougher year for the company. Yet at the same time, it also predicted that the recent decline in sales volume for fertilizer was “not sustainable given that specialty crop producers must fertilize to maximize yields and continue to provide export-quality products in order to maintain margins.”


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