Company: NGVT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001653477-25-000015
Chunk: 1266

Company: Ingevity Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1
Chunk 1266
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, Louisiana (the “DeRidder Plant”) CTO refinery and derivatives operations. All production at the DeRidder Plant ceased in the first quarter of 2024. Additionally, in July 2024, we announced plans to transition the refining of oleo-based products from our Crossett, Arkansas manufacturing plant (the “Crossett Facility”) to our North Charleston, South Carolina manufacturing plant. We ceased production at the Crossett Facility in the third quarter of 2024 and materially completed the transition in the fourth quarter of 2024. With the majority of this transformation complete, Ingevity’s participation in the rosin-based adhesive and publication printing ink markets along with emulsifiers for drilling into the oilfield markets has been significantly reduced. 

On January 16, 2025, we announced the exploration of strategic alternatives for our Performance Chemicals industrial specialties product line, including a potential divestiture of portions of the North Charleston site. This process includes all industrial specialties' pine chemicals based chemistries that serve the paper chemical, rubber, adhesive, oilfield, lubricants and industrial intermediate end-use markets, and the North Charleston, South Carolina, crude tall oil refinery. This process will not include the Performance Chemicals road technologies product line, nor certain lignin-based products that are currently reported in Ingevity’s industrial specialties product line. 

9

Raw Materials and Production

Our Performance Chemicals segment serves customers globally from five manufacturing locations in the U.S. Most of our industrial specialties products and some of our road technologies products are derived from CTO, a co-product produced by softwood kraft pulp processors. We also produce products derived from kraft lignin, which is extracted from black liquor, another co-product of softwood kraft pulp processing.

Historically, we have sourced the majority of our CTO needs through long-term supply contracts. However, CTO pricing volatility in recent years has made it difficult to manage long-term pricing mechanisms, and as a result, during 2024 we exited all material long-term contracts. We now procure our supply of CTO through shorter-duration contracts. Shorter-term contracts of 12 to 15 months enable more flexibility and transparency on pricing. On July 1, 2024, we terminated our last material long-term CTO supply contract. As consideration for the termination, we made cash payments totaling $100.0 million during 2024.

The supply of CTO is generally inelastic and governed by the volume of softwood k