Tronox move comes amid court battle - Westfair Communications

As it headed to court in an attempt to recover billions of dollars, chemicals giant Tronox Inc. simultaneously is relocating its headquarters to Stamford from Oklahoma City, with the state promising $3 million in financing.

Tronox claims status as the world”™s third-largest producer of titanium dioxide, with other producers including DuPont, Huntsman Corp. and Cristal Global. The pigment is used to whiten products ranging from paint to paper to plastic, with major Tronox customers including Benjamin Moore Paints, Sherwin Williams and PPG. In all, more than 1,000 companies buy titanium dioxide from Tronox, giving it an estimated 12 percent of the worldwide market share. In the three months ending March 31, Tronox reported an $86 million profit on revenue totaling $443 million.

Tronox will add up to 100 jobs at 1 Stamford Plaza in Stamford, with the company offering cost-of-living adjustments for those that choose to move to the state. At deadline, Tronox had yet to list any open job positions on its website.

The company”™s arrival is a welcome development given Lonza AG”™s decision to wind down its Norwalk office that once was the headquarters of Arch Chemicals, acquired by the Swiss company last year.

In mid-May, the U.S. Department of Justice and Tronox headed to federal court in Manhattan to pursue at least $15 billion from defendant Anadarko Petroleum Corp., which spent $16.4 billion to acquire Kerr-McGee Corp. shortly after Tronox was spun off from Kerr-McGee in 2005 in an initial public offering of stock. The Justice Department and Tronox claim Houston-based Anadarko improperly shifted massive liability for environmental cleanups to Tronox that should have been kept on Kerr-McGee”™s books. Anadarko”™s general counsel expressed confidence last month the company would prevail in court, with the trial still ongoing at press deadline.

In 2009, Tronox filed for Chapter 11 bankruptcy protection from creditors citing the environmental liabilities as a result of the transaction. Tronox completed the bankruptcy restructuring in 2011.

Tronox CEO Thomas Casey previously led Integra Telecom Inc. and One Communications Corp., the latter having acquired the former Connecticut Broadband via a predecessor company.

Titanium ore purchase prices are increasing significantly and those costs are threatening margins, Casey said in a February conference call. The company hiked prices 40 percent between 2010 and 2011, and expects difficulties with permitting to limit new sources of its core ore for the next few years.

With an eye on bolstering its access to titanium ore, Tronox is acquiring the mineral sands business of Exxaro Resources Ltd., with South Africa-based Exxaro getting shares of Tronox as part of the deal. The deal is contingent on South Africa”™s Department of Mineral Resources (DMR) on the transfer of mining rights at a mine there and other regulatory requirements.

If the companies complete the deal, the new Tronox will have 3,500 employees in 16 countries. The company”™s biggest plant is in Hamilton, Miss.

“This will assure us not only of 100 percent of the necessary supply for our pigment operations, but also allow us to benefit from the margin strength in this industry regardless of where it occurs in the supply chain,” Casey said in February.

Only in March, the CEO of The Woodlands, Texas-based Huntsman did not rule out attempting to acquire Tronox, in a conference call with investment analysts.

“I”™ve been very public in saying that if there is a consolidation in the (titanium oxide) industry that we would like to be part of that, that we would see ourselves as a candidate for that,” said CEO Peter Huntsman. “Tronox is a good example, but certainly there are other areas where partnering and combination of businesses would enhance shareholder value.”