KMG Chemicals Announces Alliance with Agrilabs, Inc.

HOUSTON, TX – October 15, 2009 – KMG Chemicals, Inc. (NASDAQ: KMGB), a global provider of specialty chemicals in carefully focused markets, today announced that it has formed a strategic partnership in the Animal Health marketplace with AgriLabs, Inc., of St. Joseph, Missouri.

Randy Berry, Business Manager of KMG Animal Health commented, "The core ingredients of the alliance are the sales, marketing and technical support that AgriLabs brings to KMG Animal Health’s animal insecticide product line. Our marketing and sales alliance with AgriLabs should enhance service to our customers as well as generate greater exposure for our products in the cattle, swine, dairy and equine markets.”

Mr. Berry also noted that AgriLabs’ experienced technical support team will provide KMG customers and producers with the veterinary expertise and animal production experience they have been seeking. “This was an area that we wanted to shore up,” Mr. Berry said, “AgriLabs’ technical services veterinarians will provide us with a significant tech support advantage.”

Mr. Berry stated, “It is important to note that we will continue to supply and support our current distributors who will benefit from the movement of more product through this partnership. It will be a win-win situation for KMG,  AgriLabs and our current distributors and dealers.”

Steve Schram, AgriLabs CEO, commented, “This is an exciting opportunity for AgriLabs, as well. We’ve actively sought the addition of a high quality insecticide line to our product offerings. Our sales and marketing teams are excited about the inclusion of KMG’s industry-leading Avenger® and Patriot® ear tags and quality insecticides to the AgriLabportfolio.”

The AgriLabs brand includes over 750 animal health products which are marketed through its AgriLabs, Prolabs, and Tradewinds companies. AgriLabs warehousing and shipping facility in St. Joseph, MO, is located close to KMG’s manufacturing site in Elwood, KS. 

About KMG

KMG Chemicals, Inc., through its subsidiaries, produces and distributes specialty chemicals to carefully focused markets.  The Company grows by acquiring and optimizing stable chemical product lines and businesses with established production processes.  Its current operations are focused on the wood treatment, electronic, and agricultural chemical markets.  For more information, visit the Company's web site at www.kmgchemicals.com.

The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements as to the future performance of the company. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development acceptance, the impact of competitive services and pricing and general economic risks and uncertainties.

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