Ingevity Announces Further Repositioning Of Its Performance Chemicals Business, Including The Closure Of Its Deridder, Louisiana, Facility And Additional Company-Wide Cost Reduction Actions; Total Estimated Business And Corporate Savings Of $65M-75M
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Ingevity Corporation (NYSE:NGVT) has announced a repositioning of its Performance Chemicals business, including the closure of its DeRidder, Louisiana, facility and additional cost reduction actions. The company aims to focus on higher margin and higher growth specialty products, diversify feedstocks, and optimize its manufacturing network. The total estimated business and corporate savings are expected to be $65-75 million, fully realized in 2024. The company expects to record charges associated with the DeRidder closure and restructuring of approximately $280 million. The actions taken are expected to result in a steady state Performance Chemicals segment EBITDA margin of 15-20% and total Ingevity margin of 25-30%.
November 01, 2023 | 9:55 pm
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Ingevity's repositioning of its Performance Chemicals business and cost reduction actions are expected to result in significant savings and improved margins. However, the company will incur charges associated with the DeRidder closure and restructuring.
Ingevity's repositioning strategy and cost reduction actions are expected to improve the company's profitability and reduce cyclicality. However, the company will incur significant charges associated with the closure of the DeRidder facility and restructuring, which could impact its short-term financial performance. The overall impact on the stock price is uncertain, hence the neutral score.
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