Sachtleben, a titanium dioxide joint venture between Kemira and Rockwood Holdings, has agreed to purchase the German TiO2 maker Crenox. The agreement comes as Crenox’ former owner, Tronox, completes its merger with a producer of raw material for the white pigment.
Crenox’ 100,000 metric tons of annual TiO2 capacity at a plant in Krefeld, Germany, will raise Sachtleben’s production capacity to 340,000 metric tons when the deal is completed. Crenox has 550 employees and generates about $210 million in annual revenues. The sale price wasn’t disclosed.
The Krefeld plant was once part of Tronox. But Tronox lost control of the facility after filing for bankruptcy in early 2009.
Seifi Ghasemi, Rockwood’s CEO, says he has had his eye on the Krefeld plant since before the Tronox bankruptcy. “We’ve been trying to buy this facility for more than five years as we have always believed it would be a great fit with our TiO2 business,” he says.
Sachtleben CEO Vernon S. Sumner adds that his company desperately needs the additional capacity. “For most of 2010 and 2011, we were completely sold out in our titanium dioxide business,” he says. “This acquisition provides us with a financially attractive capacity expansion.”
Meanwhile, Tronox is scheduled to complete its merger with Exxaro Resources’ mineral sands business at the end of this week. That deal, which values Tronox at about $1.3 billion, will combine Tronox’ TiO2 business with an Exxaro unit that mines TiO2 ores in South Africa. The deal is intended to provide greater raw material security for Tronox.
Under terms of the agreement, the TiO2 pigment and ore operations will be folded into a new Australian holding company called Tronox Ltd. Exxaro will own 38.5% of the new Tronox, which will begin trading on the New York Stock Exchange under the symbol TROX next week.