Kerr-McGee titanium dioxide plant undergoing $57-million expansion

Mississippi Business Journal, The, Jun 22, 1998

HAMILTON -- One of the world's largest titanium dioxide pigment plants is getting even larger with a $57-million expansion that will increase the plant's production capacity by 30,000 tons annually.

Kerr-McGee Chemical LLC recently held ground-breaking ceremonies for expansion of the plant that produces titanium dioxide, a white pigment used in paints, cosmetics, plastics and coatings. The Kerr-McGee plant in the unincorporated northeast Mississippi town of Hamilton is currently the third largest of its kind in the world.

"I congratulate Kerr-McGee Chemical on its $57-million expansion in Hamilton. The expansion is a continued expression of confidence by Kerr-McGee in its Mississippi workforce and the ability of this Mississippi plant to compete globally," said Jimmy Heidel, executive director of the Mississippi Department of Economic and Community Development.

The expansion, which is expected to be complete in the third quarter of 1999, comes on the heels of a 25% expansion completed in 1997. That expansion created a bottleneck in production that is expected to be resolved with the new expansion, said Scott Landgraf, spokesman for Kerr-McGee's Hamilton operations.

"It is hard to have every place on the production line at exactly the same capacity," Landgraf said. "After we add technical improvement and process improvements to get additional capacity on one place on the production line, we then focus attention somewhere else to catch up to that capacity."

Landgraf said when an 18-month expansion was completed in mid 1997, the finishing portion of the plant was constructed larger than necessary with future expansion needs in mind. The current expansion will increase upstream facilities to catch up with the capacity of the finishing section. Additional employment is expected following completion of the expansion.

J.E. Merit of Baton Rouge, La. is the general contractor for the expansion. About 250 to 300 workers are expected to be employed during construction of the expansion.

The expansion will bring total production capacity to 160,000 tons per year. Company officials indicated the expansion allows the company to take advantage of an estimated 3% to 4% annual increase in worldwide demand for titanium dioxide.

"We are extremely proud of our employees at the Hamilton facility, and the expansions of this plant are a direct result of their high-quality work and safety accomplishments," said Luke R. Corbett, chairman and CEO of Kerr-McGee Corp.

The plant has expanded six times since being acquired by Kerr-McGee in 1967. The plant that opened in 1958 was originally owned by American Potash and Chemical Corp.

Sales of titanium dioxide represented about two-thirds of Kerr-McGee's chemical sales in 1997. The company plans to expand titanium dioxide production, and part of that strategy included the purchase of two titanium dioxide plants in Europe earlier this year.

Kerr-McGee is also expanding its oil and gas exploration and production operations, but is currently selling its forest products, coal and electrolytic chemical businesses. Kerr-McGee has an agreement to sell its electrolytic chemical business in Hamilton, which produces sodium chlorate and manganese, to Finnish Chemicals Oy. Sodium chlorate is used in the manufacturing of paper.