Ingevity is considering shedding its industrial specialties product line at its crude tall oil site in North Charleston, South Carolina. The company hopes it will “strengthen the performance chemicals segment and improve Ingevity’s overall earnings and cash flow profile.”
The company has had to make a series of tough decisions over the past two years, and this announcement is the latest. Ingevity has closed plants, paid hefty compensation for a terminated supply deal, embarked on a $250 million restructuring, lost a CEO and seen its stock price tank. Having weathered the storm, the company expects net sales of U.S. $1.40 billion.
Divesting from its industrial specialties product line would mean no longer supplying the paper chemicals, rubber, adhesive, oilfield, lubricants and industrial intermediate end-use markets.
Industrial specialties is part of the performance chemicals segment, which also includes road technologies and road markings. These two product lines are not included in the plan.
“The announcement to seek strategic alternatives for most of the industrial specialties product line may include a potential divestiture of the business, at which time Ingevity would exit the markets mentioned,” Ingevity spokesperson Caroline Monhan told Lube Report. “However, until a determination of an action is reached and any potential transaction occurs, Ingevity will continue to manufacture products to supply our industrial specialties customers as normal. We do not expect to have any disruption in service to our customers.”
Luis Fernandez-Moreno, Ingevity interim president and CEO, explained in a press release that evaluation of the portfolio is ongoing but that the company remains “committed to taking appropriate actions, including ensuring our cost structure is aligned with our objective of being a specialty chemicals leader.”