£1.4bn deal paints picture of opportunity for Cristal
28th March 2017
A DEAL to create the world’s biggest titanium pigment producer has been welcomed by the site director of the huge Stallingborough plant.
US giant Tronox is buying out Cristal in a £1.36 billion move, having reached an agreement with the Saudi Arabian owner. And the man at the helm of the UK operation, Rob Sarracini, believes it will allow the combined company to compete on a greater level.
Mr Sarracini said: “This is a positive move for Cristal. The combination of mining assets, feedstock assets, production assets and expertise of both Cristal and Tronox will allow the combined company to expand TiO2 production, compete more aggressively in the global marketplace and provide even better service to our customers.
“Our goal is to take the best of Tronox and the best of Cristal and create an even better TiO2 company, focused on serving our customers and competing even more aggressively in the marketplace.”
The past month saw a definitive agreement signed between Tronox and National Titanium Dioxide Company, which trades as Cristal. It will receive $1.67 billion and a 24 per cent stake in the new entity.
It makes it the largest company in its field based on sales and nameplate capacity.
On the South Bank of the Humber, more than 300 full-time staff and around 100 regular contractors are employed in what is the largest production plant of its kind in Europe.
First opened in July 1953, pre-dating much of the South Bank industry that was attracted by deep water port access and flat undeveloped land, ownership has changed on several occasions. The 160-hectare site has operated as Laporte, SCM, Millennium Chemicals and Lyondell.
Cristal, then a smaller competitor in the industry, bought the business ten years ago, in a deal then worth £612 million. It has been a decade of sharp contrasts, with production temporarily halted at Stallingborough as the recession bit deep, and a major reorganisation of the 150,000 tonne capacity site completed recently.
Mr Sarracini, who arrived in October 2015 after stints in the Middle East and US, told how 2016 was a strong return for the team at what is one of the biggest private employers in North East Lincolnshire. Looking ahead to what could be a sixth entity in just over 60 years, he said: “Until the deal closes, nothing at all will change, so it is business as usual at all the Cristal sites, Stallingborough included.
“Last year was a great production year us here at Stallingborough and we are fully focused on continuing that safe, reliable production into this year, regardless of the corporate changes taking place.
“The deal is subject to regulatory clearances, which we anticipate will take at least six to nine months. Until the deal closes, Tronox and Cristal will continue to compete as independent competitors, as we always have.”
Across both businesses Stallingborough is the only UK production operation, with shared geographies being USA and Australia. Both also currently own mines in the latter, with Tronox active in South Africa and Cristal in Brazil.
Titanium dioxide is a fine white powder which is a key ingredient in products like paint, UPVC plastic and laminate. It gives brightness and durability, making products easier to use and kinder to the environment.
It also gives plastics and rubber opacity and whiteness, and is used in products as diverse as printing inks, paper, ceramics, glass, leather, synthetic fibres and colour for art paints.
Raw materials undergo highly complex chemical processes, with the site a top-tier Comah operation.
News Courtesy: www.humberbusiness.com