Originally created 04/09/00

Firm buys Savannah plant



SAVANNAH -- Kerr-McGee Corp. moved one step closer Thursday to becoming the world's third-largest maker of titanium dioxide pigment -- the powder making your whites whiter.

Products such as sunscreen, paint and white paper need titanium dioxide pigment.

Oklahoma City-based Kerr-McGee, already a world leader in the pigment field, made its purchase of Kemira Oyj's Savannah-based pigment plant final Thursday. It is awaiting government approval in The Netherlands on the purchase of another Kemira plant in Botlek.

Kerr-McGee is paying $403 million to buy both plants.

The Savannah plant, which served as Kemira's American headquarters, will now join a plant in Hamilton, Miss., as one of Kerr-McGee's two U.S. titanium dioxide manufacturing plants.

Richard R. Dean has been named Kerr-McGee's Savannah manager. He is currently working for Kerr-McGee in Australia and is expected to arrive in Savannah in about a week. As for the nearly 640 other Savannah employees, Kerr-McGee officials are remaining tight-lipped about exactly what the acquisition means for them.

"Savannah will move from being a corporate site to being an operations site," said Debbie Schramm, a Kerr-McGee spokeswoman.

By the end of April, Ms. Schramm said, Kerr-McGee will have completed its review of the Savannah plant. Among the many things Kerr-McGee officials will be looking at is whether any of the Savannah jobs are being duplicated in Hamilton.

"We expect to achieve cost reductions in excess of $40 million per year over the next two years," Luke R. Corbett, Kerr-McGee's chairman and chief executive officer said in a statement released by the company. "I am also confident that, with our expertise and technological advancements, we can create additional value for shareholders through our titanium dioxide pigment business."

A second U.S. plant helps the company meet the demand of its North and South American customers, Ms. Schramm said. Kerr-McGee controls 16 percent of the world's titanium dioxide market.

Kerr-McGee officials also will evaluate what improvements need to be made to the Savannah plant. Since 1987, the Georgia Environmental Protection Division has written 10 consent orders against Kemira for violations of air quality standards and five orders for water-quality standard violations.

During the past two years, Kemira spent $1.6 million to meet the terms of those consent orders. A consent order is a negotiated settlement between a violating company and a state enforcement agency. It is designed to address an environmental problem and has the weight of a court order.

Kerr-McGee, which has earned the prestigious ISO 14000 certification for the environmental safety of its Hamilton plant, is planning to upgrade the equipment in Savannah, Ms. Schramm said. Kemira was already using Kerr-McGee's chloride process in Savannah under a licensing agreement, but several improvements have been made to the process that are not being used locally, Ms. Schramm added.

Kerr-McGee is an energy and inorganic chemical company with worldwide operations and assets of about $7 billion.