Venator Will Shut Down 130,000 Tonnes of Titanium Dioxide Production Capacity
Simon Turner, Venator's CEO, has announced that Venator is closing its Scarlino, Italy and Duisburg, Germany plants, with a combined capacity of 130,000 tonnes of sulphate based titanium dioxide.
The Italian Scarlino plant, which has an annual capacity of 80,000 tonnes, will only be operating at one-third capacity in the fourth quarter of 2022 and the first quarter of 2023 due to the impending expiry of the old titanium gypsum disposal and discharge permit and the delay in the approval of a new permit. According to Simon Turner, at the current start-up rate, titanium dioxide production will only continue until the second quarter of 2023. If additional gypsum stockpile permits are not obtained by the end of the first quarter, Venator will cease production from the second quarter and close the plant permanently.
Production capacity at the Duisburg plant in Germany is 50,000 tonnes per annum, mainly producing titanium dioxide for the chemical fibre sector. Demand for this product continues to be weak due to the impact of the New Crown epidemic. At the same time, the plant has been affected by high inflation and significant cost increases have made it difficult to sustain production. The plant has suspended production and taken most of its employees on leave for the fourth quarter of 2022 and the first quarter of 2023. Following a review and assessment, Venator has concluded that it is not economically viable to continue production at the plant. As a result, Venator will permanently shut down the plant and transfer production of the relevant grades of titanium dioxide to other plants.
According to Simon Turner, stock removal in Europe is largely complete and sales of titanium dioxide have picked up in the first quarter, but higher cost of sales and lower average selling prices will offset the benefits of higher volumes. As a result, EBITDA will be significantly lower in the first quarter than in the fourth quarter.
