Elementis acquisition31 October 2002
Elementis, one of the world's largest producers of chromium, have acquired North Carolina-based chromium chemical business Occidental Chemical Corporation for $46 million. At the same time, however, the company have announced that they will take an impairment charge of 25-30% in the year to December 31 against £118 million ($183 million) of net assets of their existing chromium division. The company believe that chromium demand is expected to fall 5% globally and 30% in the US this year following an Environmental Protection Agency ruling that seeks to limit chromated copper arsenate use from 2004 for consumer applications. The company said that the purchase 'would secure the future of the chromium business in the US'. Brian Taylorson, finance director, added: 'We're spending $46 million for annualised cost savings of £10 million.' However, Taylorson confirmed that one of the two plants in Texas and West Virginia, together employing 235 staff, would be 'mothballed'. The deal is subject to regulatory approval.