HOUSTON—The North American region has a new manufacturer of zinc oxide—Zinc Oxide L.L.C., the first company of its kind to start up in more than 20 years.
The new company will produce French process zinc oxide grades designed for the rubber, tire, chemical, pharmaceutical, cosmetic, oil additives, ceramics, electronics, glass, plastics, latex, paint and coatings, tape and adhesives and fertilizer markets, among others.
The firm will sell its product through a network of direct sales staff and distributors.
Zinc Oxide is trying to fill a void in the market, according to Ed Smith, Zinc Oxide senior vice president of sales and marketing. He said Horsehead Corp.'s closing of its Monaca, Pa., zinc oxide plant at the end of 2013 will cause a capacity shortage of about 74,000 metric tons of the chemical, used in the vulcanization process.
"Other companies are expanding capacity, but not nearly enough to fill the void," Smith said. "We felt it was a good time to start a new company, bring the security supply in and keep the pricing levels in check. We think the market will be in a deficit next year, and we want to fill that deficit."
The company production facility will be located in Dickson, Tenn. According to Smith, the site was chosen because it is an existing building; Dickson has low natural gas costs and relatively low freight costs; a non-union work force; and the company received local and state incentives.
The 180,000-sq.-ft. building sits on 50 acres and is ISO certified. It will have the capacity to produce 40,000 metric tons of the chemical. Smith said there is room to expand to 70,000 tons.
"That wouldn't be for a couple of years down the line if we choose to expand," Smith said. "We have room under the roof, which is nice because we wouldn't have to build a new building."
The company will produce zinc oxide using muffle furnace technology, which Smith said is the lowest cost production method globally. Smith said Zinc Oxide will have made an approximate $25 million investment in the plant.
"It's a very high volume with low cost method," Smith said. "We're going to be building state of the art, the largest, most efficient muffle furnaces, and we're going to design them ourselves."
The plant will operate by March 2014. Smith currently is lining up customers to sample the product.
"I've met with key customers who use about 75 percent of the volume in use, and they've all committed to testing our product," Smith said.
Zinc Oxide will have plenty of veterans on its senior management team. In addition to Smith—who brings 23 years of experience—CEO Russ Robinson has worked in the industry for 33 years; President Barry Hamilton for 34; Ron Crittendon, senior vice president of operations, for 28; and Jimmy Kight, plant manager, brings 21 years of experience.
Smith spent his time prior to Zinc Oxide at U.S. Zinc Inc. and estimates he worked with his fellow senior management team members from 15 to 20 years in various roles with the company.
Zinc Oxide will employ between 50 and 60, including plant workers in Dickson.