Part I, Item 1A, Risk Factors of our 2023 Annual Report sets forth information relating to important risks and uncertainties that could materially adversely affect the Company’s business, financial condition and operating results.
−Removed: Except as set forth below, there have been no material changes in Ingevity's risk factors disclosed in Part I, Item 1A, Risk Factors of our 2022 Annual Report for the quarter ended September 30, 2023.
−Removed: There may be negative impacts to our business arising out of the closure of our plant in DeRidder, Louisiana.
−Removed: On November 1, 2023, we announced our plan to permanently close our plant in DeRidder, Louisiana (the “DeRidder Plant”).
−Removed: The anticipated timing, charges, and costs of the closure of the DeRidder Plant could materially differ from our estimates if the plant closure results in adverse legal or regulatory actions, if personnel required to effect the shutdown become unavailable, or we are affected by other factors not currently contemplated.
−Removed: As a result of the Deridder Plant closing and reduced CTO refining capacity, we expect to have CTO inventory available for sale.
−Removed: Depending on the then current market price for CTO at the time of such sales, we expect to have to sell the CTO at a loss, which may adversely affect our financial condition and results of operations.
−Removed: The closure of WestRock’s paper mill in North Charleston may negatively impact our production, financial condition, and results of operations.
−Removed: On May 2, 2023, WestRock Company (“WestRock”) announced that it will permanently cease operating its paper mill in North Charleston, South Carolina and notified Ingevity that it is terminating the Reciprocal Plant Operating Agreement between WestRock Charleston Kraft LLC and Ingevity South Carolina, LLC dated as of July 1, 2008, as amended (the “RPOA”), effective as of August 31, 2023.
−Removed: WestRock provides certain critical operating services to us at our plant in North Charleston, South Carolina under the RPOA, including steam, water and wastewater.
−Removed: WestRock also disposes of brine, a by-product resulting from our conversion of black liquor soap skimmings into crude tall oil, and provides other non-critical services that support our operations.
−Removed: We may be required to expend significant capital to provide these services ourselves if we are unable to obtain these services from other third parties on a timely and cost-effective basis.
−Removed: The costs associated with replacing these services may be significant and any delay in our ability to replace these services could result in interruptions to our operations, both of which could adversely affect our financial condition and results of operations.
+Added: Except as set forth below, there have been no material changes in Ingevity's risk factors disclosed in Part I, Item 1A, Risk Factors of our 2023 Annual Report for the quarter ended March 31, 2024.
+Added: The repositioning of our Performance Chemicals business will negatively impact the company’s net sales and may otherwise adversely affect our financial condition and results of operations during this transition period.
+Added: On November 1, 2023, we announced a number of strategic actions designed to further reposition our Performance Chemicals reportable segment to improve the profitability and reduce the cyclicality of the company as a whole.
+Added: These initiatives—including our plan to close our plant in DeRidder, Louisiana—will result in the reduction, and in some cases exit, of certain historical end-use markets of our industrial specialties product line, such as adhesives, publication inks, and oilfield, approximately 45 percent of our industrial specialties product line historical annualized net sales.
+Added: We expect to incur aggregate charges of approximately $280 million associated with the Performance Chemicals' repositioning, consisting of approximately $185 million in asset-related charges, approximately $15 million in severance and other employee-related costs, and approximately $80 million in other restructuring costs, including decommissioning, dismantling and removal charges, and contract termination costs.
+Added: The company expects approximately $185 million of the total charges to be non-cash.
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