Chemtura Sheds Oleochemicals


Chemtura Corp. on Friday announced it had agreed to sell its global oleochemicals business to PMC Group NA Inc. for an undisclosed amount, subject to financing and other conditions. Chemtura said it will use proceeds from the sale – which includes Chemturas production facility in Memphis, Tenn. – primarily for debt reduction. PMC Group plans to offer jobs to all the oleochemicals business employees.

The transaction is expected to close by the end of the first quarter. The oleochemicals business had revenues of about $175 million in 2007.

PMC is a Chemtura customer – they buy polymer additives from us, Chemtura director of corporate communications Debra Durbin told Lube Report. We believe they represent a good prospect for growing the business, and present opportunities for our employees.

Chemturas Memphis facility produces fatty acids, fatty esters, glycerin approved for pharmaceutical applications, glycerol esters, amides, bisamides, stearates and triglycerides. According to Middlebury, Conn.-based Chemtura, the Memphis plant is the only producer of primary amides in North America for the plastics additives market. Chemturas Durbin said the Memphis plant, which was built in 1948, was originally owned by Kraft Foods.

Patti Griggs, PMC Group director of customer and administrative services, said the company bases its growth strategy on specialty chemicals and engineered resins. This is going to fit right in line with our specialty chemicals, Griggs told Lube Report. Theres a lot of synergistic value with our Crystal facility and our European facility called Ouvrie – PMC.

PMC subsidiaries include Stockertown, Pa.-based PMC Group Polymer Products, which specializes in design and development of additive masterbatches and flame retardant compounds; Lansdale, Pa.-based Crystal Inc.-PMC, which is a supplier of specialty antifoam and defoaming agents, metallic stearates, rubber and plastic processing aids, cable filling compounds, wax emulsions, specialty petrolatum and waxes; and Ouvrie – PMC, a specialty chemicals company in Lesquin, France that manufactures defoamers, and also specialty esters for various applications.

According to PMCs own announcement Monday, all employees directly involved in the business will be given the opportunity to transfer to PMC as part of the transaction on substantially the same terms as they currently have. There are actually 275 employees involved, including the sales team, said Griggs, who is also assistant to the chairman of PMC Groups board of directors. Were giving each one of those employees employment with PMC Group.

PMC Group has its global headquarters in Mount Laurel, N.J. The privately held manufacturer was founded in 1994 by PM Chakrabarti, former chief of technology at PPG Industries.

This transaction will be another step in improving our polymer additives business by strategically divesting product lines to better focus on the products and businesses where we have our greatest strengths and leading market positions, said Chemtura Chairman and CEO Robert Wood.

On Dec. 18 Chemtura announced that its board of directors had authorized management to consider a wide range of strategic alternatives available to the company to enhance shareholder value. The company said the strategic alternatives it would consider may include, among others, select business divestitures, value-creating acquisitions, changes to the companys capital structure, or a possible sale, merger or other business combination involving the entire company. At the time, Chemtura said it would not disclose any further developments with respect to exploration of the strategic alternatives unless and until its board of directors approved a transaction or other strategic alternative.

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