Ingevity Corp. ended its crude tall oil purchase agreement with GP Pine Chemicals LLC after several years of partnership, citing a strategic realignment of its performance chemicals business.
The termination is effective immediately and will cost Ingevity U.S.$100 million in breakup fees, paid in two instalments, with construction materials and paper company Georgia-Pacific, GP Pine Chemicals’ parent.
Tall oil is a wood-pulping byproduct that contains fatty acids, among other substances. Ingevity uses it to make a range of metalworking fluids.
Ingevity is contracted to buy crude tall oil from Georgia-Pacific until the end of the month if the amount it bought in June did not meet the agreed volume.