US-based specialty chemicals producer Ingevity is considering the sale of its performance chemical industrial specialties product line and its crude tall oil (CTO) refinery in North Charleston, South Carolina.
Industrial specialties go into the paper chemical, rubber, adhesive, oilfield and lubricants markets.
A secondary refinery at the North Charleston manufacturing plant, which has capabilities to refine CTO and oleochemicals, is not included in the review, the company told Argus. Nor is its performance chemicals road technologies product line, nor certain lignin-based products reported in the company's specialty product line.
Ingevity said exiting most of its specialties product line will help it focus on higher margin and growth opportunities, but added said it cannot assure the process will result in a transaction. The company expects to communicate further plans before year-end, but does not intend to disclose additional developments until it is determined that disclosure is appropriate.
Market participants told Argus the announcement opens up opportunities for either a new or an existing pine chemicals company seeking to operate in the US market. One said flexibility into the potential terms of a deal would probably help Ingevity find a buyer. But uncertainties over agreements with other service providers would make a deal more complex, another said.
The closure of Ingevity's CTO fractionation sites in DeRidder, Louisiana, in 2024, and the conversion of a facility in Crossett,Arkansas, in 2023 to run 100pc on non-tall oil fatty acids cut US CTO refining capacity by 30pc or 300,000t, sources have estimated.
The measures also led to reduced domestic CTO consumption into fractionation and local tall oil fatty acids (TOFA) supply for the lower-rosin grades, sources said. TOFA is a fraction obtained by the distilling of CTO feedstock.
