Chemours to Close US TiO2 Plants as Part of Transformation Plan
Chemours, the former DuPont Performance Chemicals business, is to close its Edge Moor titanium dioxide (TiO2) plant located outside Wilmington, Delaware, USA, as well as a third production line in New Johnsonville, Tennessee.
The closures will remove roughly 150,000 t/y of TiO2 capacity from the market. Chemours said the move will enhance production capabilities at its four other manufacturing plants and position it for growth in the TiO2 industry.
“The decisions we are announcing today are connected directly to our five-point transformation plan, which sets out a clear, achievable path to our becoming a higher value chemistry company,” said Mark Vergnano, president and CEO of Chemours.
E. Bryan Snell, president of Chemours Titanium Technologies, added: “Our plants in Mississippi, Tennessee, Mexico and Taiwan enjoy industry-leading productivity as well as the ability to use ore feedstock across the quality spectrum. These factors give us a low-cost position that is a key competitive position.”
The Edge Moor plant produces a grade of TiO2 used in paper applications that have been declining steadily for years, resulting in underused capacity. Chemours said it will continue to provide customers with similar product from its Johnsonville plant.
Line 3 at Johnsonville is said by Chemours to be small scale and high cost compared with its other production plants.
Production is planned to stop at both Edge Moor and Johnsonville at the end of September 2015. Chemours expects to complete decommissioning of the Edge Moor plant around March 2016 when it will begin dismantling the facilities which could take a year or longer, depending on the site’s future use. The company said it will begin exploring options for the site’s redevelopment immediately.
The closures are expected to reduce annual net costs by $45 million. Non-cash charges of around $110 million will be incurred in the third quarter, while additional restructuring and other related charges are expected to range between $75 million and $85 million during the next two to three years.
Approximately 200 people work at the Edge Moor plant and Chemours said it will redeploy employees wherever possible.
The five-point transformation plan aims to transform the company by reducing structural costs, growing market positions, optimizing its portfolio, refocusing investments and enhancing its organization.
Restructuring initiatives are expected to save $40 million in the second half of 2015, $200 million in 2016 and $350 million in 2017.
Chemours has begun evaluating strategic alternatives for its Chemical Solutions segment, excluding the cyanide business where it will focus on investing for growth. It will also continue to ramp up its Opteon refrigerants business.
An expansion of its Altamira TiO2 production plant in Mexico is scheduled to start up in the middle of next year.