Chemours Consolidates and Strengthens TiO2 Business
The Chemours Company announced two decisions that are elements of the company's five-point transformation plan.
The company will close its Edge Moor manufacturing site located outside Wilmington, Delaware, which produces titanium dioxide (TiO2) and will shut down a TiO2 line (line 3) at its Johnsonville plant in New Johnsonville, Tennessee. Together, these actions will eliminate roughly 150,000 metric tonnes of TiO2 capacity while refocusing TiO2 production at four manufacturing sites that employ the full range of Chemours TiO2 technology strengths. These changes position Chemours to grow in the TiO2 industry by enhancing its production capabilities. Most importantly, they allow the company to continue to meet the needs of its customers around the globe.
"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.
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, with an accompanying slowdown in demand that has resulted in underused capacity at Edge Moor. Chemours will work with current Edge Moor TiO2 customers to continue to provide them with similar product from the company’s Johnsonville plant.
The Edge Moor plant has approximately 200 employees and 130 contractors. Chemours will redeploy employees wherever possible and where redeployment is not possible employees will receive severance benefits.
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 inthe 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 $85million and incurred during the next two-to-three years.
The company is targeting the end of September to stop production at Edge Moor and Johnsonville line 3. At Edge Moor, Chemours expects to complete decommissioning around March 2016 and then begin dismantling facilities, which could take a year or longer depending on future use of the site.
The Chemours five-point transformation planis focused on five strategic elements: reducing structural costs, growing market positions, refocusing investments, optimizing the portfolio, and enhancing the organization.
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