Tasnee signs deal to sell Jazan smelter to Tronox

Tronox’s acquisition of Tasnee’s Cristal — announced in February 2017 — has faced regulatory hurdles. (Courtesy, Tronox)
Updated 10 May 2018
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Tasnee signs deal to sell Jazan smelter to Tronox

  • Option agreement follows technical services agreement for building of Jazan facility
  • Titanium dioxide pigments are used in paper, paints and plastics.

DECODER: Titanium dioxide is a naturally occurring substance, mined in countries including Australia, South Africa and Canada. Titanium dioxide pigments are used in paper, paints and plastics.


Saudi industrial conglomerate Tasnee has signed an option agreement to sell a 90 percent stake in its titanium smelter in the south western city of Jazan to US-based Tronox.

The deal comes as a merger agreement between Tronox and Tasnee-subsidiary Cristal remains mired in regulatory turmoil.

Under the terms of the option agreement, signed between Tronox and Tasnee subsidiary AMIC (co-owned by Cristal), the US-based chemicals giant will acquire 90 percent of the Jazan-based titanium slag smelter facility, which has the capacity to supply up to 500 thousand tons (kt) of titanium dioxide slag and 220kt of pig iron.

The option agreement follows a technical services agreement between the parties, which will see Tronox provide technical assistance to AMIC to facilitate the startup of the smelter. Upon reaching the sustained operations of the facility, Tronox shall exercise its option to acquire the stake.

As part of the option agreement, AMIC will create a Saudi-incorporated SPV and contribute its ownership interest along with $322 million of debt currently held by AMIC. Tronox has agreed to lend AMIC and the SPV up to $125 million for capital expenditures and operational expenses — which may be drawn down on a quarterly basis as needed — to facilitate the start-up of the facility.

“By combining slagger operations expertise of Tronox with that of AMIC under the Technical Services Agreement, we will work together to ensure the successful commissioning and ramp-up of this world-class smelter in Jazan,” said Tasnee CEO Mutlaq Al-Morished in a statement.

The smelter agreement occurs against the backdrop of Tronox’s drawn-out bid to acquire Tasnee subsidiary Cristal, first announced in February 2017. Regulators in the US and Europe have opposed the acquisition — which would make Tronox the largest titanium pigment producer in the world — fearing the move would reduce competition in the market.

Tronox announced an extension to the acquisition agreement in March, and aims to complete the transaction by end-June.


Auto parts suppliers warn hard Brexit may set UK back 25 years

Updated 17 October 2018
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Auto parts suppliers warn hard Brexit may set UK back 25 years

  • Europe’s carmakers’ lobby ACEA and suppliers’ association CLEPA, along with BMW and brakes maker Brembo, jointly warned that a no-deal exit would be catastrophic for the industry
  • Roberto Vavassori: The recovery of Britain’s auto sector in the 20 years since the decline of British Leyland and its successor Rover Group was based on investment from around the world

BRUSSELS: Failure to secure a trade deal for Britain when it exits the EU next year could set the UK auto sector back two decades, leading parts suppliers said on Wednesday as they urged leaders to reach agreement at a summit in Brussels.
Europe’s carmakers’ lobby ACEA and suppliers’ association CLEPA, along with BMW and brakes maker Brembo, jointly warned that a no-deal exit would be catastrophic for the industry.
The “just-in-time” industry model relied on frictionless trade between Britain and mainland Europe, they said.
“If we are continuing to be taken hostage by this situation, the flourishing UK auto industry could come back to the situation it was at 20-25 years ago,” said Roberto Vavassori, a management board member at Brembo and president of CLEPA.

 

The recovery of Britain’s auto sector in the 20 years since the decline of British Leyland and its successor Rover Group was based on investment from around the world, he said.
Vavassori said he felt “betrayed” that Brembo’s manufacturing in Coventry, UK, would be a different prospect post-Brexit from the time of its investment 15 years ago.
ACEA said contingency planning by its members included temporary production shutdowns and scouting for warehouse space to stockpile parts.
“No amount of contingency planning can realistically cover all the gaps left by the UK’s withdrawal from the EU on WTO terms,” ACEA said, referring to a no-deal scenario in which Britain would have no preferential access to EU markets.
Some 1,100 trucks arrive in Britain every day from elsewhere in the country with parts for the UK auto sector, and storage space to cover more than a day or two of production was not feasible.
The EU leaders’ meeting from Wednesday had hoped to reach a provisional Brexit deal before signing off on a withdrawal agreement at a special Brexit summit
in November.
The talks, stalled since Sunday, are stuck over the issue of how to avoid a hard border between the British province of Northern Ireland and the Irish Republic.
BMW said that its survey of
Brexit preparedness showed only 10 percent of British automotive suppliers and 41 percent of EU suppliers considered they were well prepared for Brexit, with many having little or no experience of customs clearing.
Stephan Freismuth, customs manager at BMW, said that at the Channel tunnel and ports such as Dover there was no customs
infrastructure and, in some cases, no space for trucks awaiting checks to park.

FACTOID

Some 1,100 trucks arrive in Britain every day from elsewhere in the country with parts for the UK auto sector.