Ingevity Announces Closure of Crossett, Arkansas Chemical Facility

Ingevity Corporation is executing a strategic overhaul of its Performance Chemicals segment to drive sustained profitability growth. A core component of this initiative involves consolidating segment operations at its North Charleston, South Carolina facility. By relocating oleo chemical refining to the site's secondary refinery and subsequently closing the Crossett, Arkansas facility in August, Ingevity aims to optimize operational efficiency, reduce costs, and enhance overall financial performance. This strategic decision underscores the company's commitment to improving its competitive position within the industry.

The company is set to optimize its manufacturing footprint by integrating oleo-based chemical refining with crude tall oil refining operations at its North Charleston, South Carolina facility, while shutting down its Crossett, Arkansas facility in August. This strategic consolidation aims to streamline operations and enhance efficiency, leading to estimated annual savings of $20 million to $25 million starting in 2025. By centralizing production and closing the less efficient Crossett facility, the company expects to significantly reduce costs and improve overall financial performance, reflecting a commitment to operational excellence and resource optimization.

Rich White, Senior Vice President and President of Performance Chemicals at Ingevity, noted that the growth in their oleo markets has been hindered by a slow industrial recovery. He highlighted that the company initially piloted oleo chemical refining at their North Charleston facility. Following recent strategic adjustments, they have confirmed the site’s ability to produce both oleo-based and crude tall oil-based chemistries. This capability is essential for meeting current customer demands and supporting anticipated new business. Additionally, the facility has the potential to expand its capacity cost-effectively to accommodate further market growth in the coming years.

Fortson added that these strategic actions are crucial for positioning Ingevity for future success and achieving sustained profitability in the Performance Chemicals segment. He acknowledged the difficulty of the decision due to its impact on employees and the local community. Expressing gratitude, he thanked all employees for their dedication and service to Ingevity, recognizing their significant contributions during this challenging transition.

The company anticipates achieving net savings of $20 million to $25 million annually starting in 2025 from the closure of its Crossett facility. Additionally, it plans corporate and business-related cost reduction measures that are expected to generate around $10 million in annual savings from 2025. These actions underscore the company's commitment to improving operational efficiency and financial performance by streamlining its operations and reducing overall costs.

Ingevity is a global leader in specialty chemicals and advanced materials. The company offers a diverse portfolio of products and technologies that address critical industry challenges while promoting sustainability. Ingevity's business is organized into three segments: Performance Materials, Advanced Polymer Technologies, and Performance Chemicals.