The Chemours Company will close its Edgemoor plant as part of a cost-cutting and efficiency drive.
The company will close themanufacturing site outside Wilmington, Delaware, which produces titanium dioxide (TiO2) and will shut down a production line at its Johnsonville plant in New Johnsonville, TN.
The closings will eliminate roughly 150,000 metric tons of TiO2 capacity while refocusing production at four manufacturing sites.
“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, CEO of Chemours.
The Edge Moor plant is configured to produce a TiO2 product for use in the paper industry, an area that has seen lower demand.
Chemours will work with current Edge Moor 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.
“The governor is disappointed for the workers and families impacted by today’s announcement. The Administration stands ready to provide support to any workers who need assistance and will remain in close contact with Chemours about the advantages of locating other operations in Delaware,” stated Kelly Bachman, Gov. Jack Markell’s press secretary. “Overall, our economy continues to make good progress with job growth that leads the region and we remain focused every day on ways to ensure good employment opportunities exist for every Delaware worker.”
Chremours has reportedly been scouting sites for a new headquarters in the region. The company has about 800 workers in the state, minus the 200 jobs that will be lost with the closing of Edgemoor.
The closing was bad news in efforts to grow the state’s manufacturing sector, which never fully recovered from the loss of the state’s two auto plants in 2008 and 2009.
“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. “However, we believe this is the right business decision. Chemours is committed to the TiO2 market, and these changes position us for growth in the industry.”
“Our manufacturing capabilities are our greatest strength,” added Snell. “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 advantage. 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. By shutting these down we’re concentrating our resources in a way that plays to our strengths.”
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 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. Chemours will work with all of our site customers during this transition.
To help ease this transition for the community, Chemours will begin immediately exploring options for site redevelopment that align with the best interests of the surrounding Edge Moor community and local and state economic development leaders, the company announced.
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, a release stated.
The titanium dioxide had long been a lucrative business for DuPont, with the company often having pricing power over the product that is used in paint, paper and other applications.
In recent years, the titanium business has seen pricing pressures, with the Edgemoor plant believed to be the highest-cost location. Changes in that business contributed to the decision by DuPont to spin-off performance chemical businesses into Chemours.
Chemours was spun off from DuPont in July. Stock is now trading at around $9.50 a share, about 20 cents above its lowest price after the spin off.
Cris Koons said last month that TTP would be good companies like DuPont, at least he doesn’t lie. Don’t worry the Koch brothers will but the plant and hire for $15 a hour. The place is a superfund site, it would cost a billion dollars to dismantle and clean up. I’ll bet the place is already sold. Georgia Pacific needs cheap TIo2 and invista will buy it to supply G/P’s paper industry. They’ll buy it after markell hands them 30 million to clear hurdles just like the del city refinery. It’s a bs