Ingevity to shutter DeRidder, Louisiana production facility

Ingevity Corporation, based in North Charleston, South Carolina, U.S.A., has unveiled a series of strategic decisions aimed to further reposition its Performance Chemicals division. 

“Our renewed focus on expanding profitable sectors like Pavement Technologies and transitioning away from crude tall oil (CTO)-based fatty acids stems from a thorough analysis of our market dynamics. We aim to address the challenges posed by our rosin-based markets and the rising costs of CTO influenced by the biofuels sector,” John Fortson, president and CEO of Ingevity, said.

Key announcements made by Ingevity on November 1, 2023 include:

• The impending closure of Ingevity’s DeRidder, Louisiana, production facility, which primarily produces CTO-based products. The shutdown is scheduled for the first half of 2024.
• Anticipated corporate savings of USD65-75 million by 2024, inclusive of a previously announced USD35 million.
• Expected charges of around USD280 million related to the DeRidder facility’s closure and other restructuring efforts. Of this, approximately USD180 million will be non-cash charges.

CTO is a byproduct of the kraft process of wood pulp production. CTO contains fatty acids, rosin acids, and other extractives, which can be refined and processed into biofuels. The interest in CTO as a feedstock for biofuels to produce renewable diesel and bio-based jet fuel, has grown significantly due to global efforts to reduce carbon emissions and promote cleaner energy sources. This demand has led to an increase in the value of CTO, making it a more competitive and sought-after commodity in the biofuels industry. These fuels are considered more sustainable alternatives to their fossil-based counterparts because they can reduce greenhouse gas emissions and are derived from renewable resources.

Tall oil fatty acids (TOFA) are versatile products derived from crude tall oil, used in the formulation of metalworking fluids, which are essential in metal processing for lubrication and cooling.

The DeRidder facility’s closure will impact around 180 employees, with an additional 120 roles affected in business and support areas. Cumulatively, these changes represent a nearly 20% reduction in Ingevity’s global workforce.

Rich White, senior vice president and president of Performance Chemicals, commented on the company’s dedication to its customers, ensuring minimal disruptions and a commitment to a more diverse product portfolio in the future.

Reflecting on the DeRidder facility’s significance, Fortson added, “While today’s announcement is challenging, it’s a crucial step towards Ingevity’s long-term objectives. I extend my gratitude to all our dedicated employees for their unwavering commitment.”