Chemours cut titanium dioxide capacity; expects $45 mn cost reduction

Chemours to cut titanium dioxide capacity; expects $45 mn cost reduction

5:24 PM, 21st August 2015
Chemours to cut titanium dioxide capacity; expects $45 mn cost reduction
Mark Vergnano, president and CEO of Chemours. (File photo)

WILMINGTON, US: The Chemours Company said it will close its titanium dioxide (TiO2) manufacturing Edge Moor site located outside Wilmington, Delaware and will shut down a TiO2 line at its Johnsonville plant in New Johnsonville, Tennessee.

Together, these actions will eliminate roughly 150,000 metric tonne of TiO2 capacity. These changes position Chemours to grow in the TiO2 industry by enhancing its production capabilities and meet customer needs globally, it said.

The company is targeting the end of September to stop production at Edge Moor and Johnsonville. At Edge Moor, Chemours expects to complete decommissioning around March 2016.

The Edge Moor plant has approximately 200 employees and 130 contractors. Chemours will redeploy employees wherever possible. “A plant closure is never an easy decision, because of its impact on people who are valued members of our company,” said E Bryan Snell, president of Chemours titanium technologies.

“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. Meanwhile, underused capacity at our Edge Moor plant keeps it from being cost-effective. And, the line at Johnsonville (line 3) is relatively small scale and high cost compared to our other production units,” added Snell.

“The decisions we are announcing 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.

The Edge Moor plant is configured to produce a TiO2 product for use in the paper industry, in applications that have declined steadily for years.

As part of the company’s transformation plan, these closures are expected to result in a $45 million annual net cost reduction. The company will incur non-cash charges of approximately $110 million related to the facility closing in the third quarter. Additional restructuring and other charges related to severance, decommissioning and site redevelopment are expected to be in the range of $75 million to $85 million and incurred during the next two-to-three years.

The Chemours five-point transformation plan is focused on five strategic elements: reducing structural costs, growing market positions, refocusing investments, optimizing the portfolio and enhancing the organization.

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