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Acquisition expands MeadWestvaco’s local operation
By Dan McCue
Staff Writer
MeadWestvaco Corp. has announced its acquisition of the Eastman Chemical Co.’s pine chemicals product line and its intention to shift an unspecified amount of work to its Charleston plant.
No financial figures related to the transaction have been disclosed.
The acquisition of Eastman Chemical’s tall oil rosins and tall oil fatty acids product lines will expand MeadWestvaco’s Specialty Chemicals’ Performance Chemicals business. The company operates specialty chemical plants in Charleston and in DeRidder, La.
MeadWestvaco spokeswoman Ricki Carruth said the manufacturer is acquiring intellectual assets of Eastman, rather than physical assets, and that no employees will be transferred between the companies.
She said that while the deal will expand MeadWestvaco’s business, the company believes its current production capacity and production team will be able to absorb the new work.
“This agreement will make our business operations in Charleston stronger and more profitable,” she said. “While our overall goal, of course, is to continue to grow the business, we don’t anticipate an increase to the size of our staff at this time.”
Varied uses
Tall oil, also called liquid rosin or tallol, is a byproduct of wood pulp manufacture. Crude tall oil is distilled to obtain tall oil rosin and tall oil fatty acid.
The rosin is used in adhesives, rubbers and inks and as an emulsifier. The pitch is used as a binder in cement, as an adhesive and as an emulsifier for asphalt.
The fatty acid is a low-cost alternative to tallow fatty acids for producting soaps and lubricants. It is also used in adhesives and oil-based varnishes.
Tall oil is also used in oil drills. The products are also used in paints, coatings and building materials.
As part of the deal, MeadWestvaco is acquiring all intellectual property and technology associated with Eastman’s Pamite tall oil rosins and Pamak tall oil fatty acids.
“This acquisition underscores our commitment to achieving sustainable, profitable growth in Specialty Chemicals,” said Ed Rose, vice president of MeadWestvaco’s Specialty Chemicals’ Performance Chemicals division, in a statement. “The integration of the Pamite and Pamak technologies into our world-class refineries will allow us to continue to enhance our manufacturing efficiency and provide unparalleled value and innovation to our customers,” Rose said.
Eastman work not relocated to Charleston will be shifted to MeadWestvaco’s other specialty chemicals plant in DeRidder, La.
MeadWestvaco currently employs about 1,500 in the Lowcountry. Of those, about 280 work in its specialty chemicals division. The company employs more than 24,000 worldwide in more than 30 countries.
The specialty chemicals division of the company reported a fourth-quarter profit of $6 million compared to $8 million in 2006. Sales in the fourth quarter of 2007 increased 5% to $123 million from $117 million in 2006.
Higher materials cost
The company said those numbers were affected by higher raw material costs, lower North American automotive sales and weak demand for building products, which negatively impacted both volume and mix.
The specialty chemicals division’s full year 2007 profit decreased to $37 million compared to $51 million in 2006. Sales in 2007 were $493 million, unchanged compared to 2006.
MeadWestvaco Corp. reported 2007 fourth-quarter net income of $148 million. Sales in the fourth quarter of 2007 increased 4% to $1.85 billion compared to $1.78 billion in the fourth quarter of 2006.
Dan McCue is a staff writer at the Business Journal. E-mail him at dmccue@scbiznews.com.
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