Ahead of his keynote presentation at this October's TiO2 World Summit, we spoke to Jean-Francois Turgeon, Executive Vice President of Tronox, about the challenges and opportunities faced in the current supply/demand climate, Tronox's acquisition of Cristal and more.
The global shortage of TiO2 has had a massive impact on pigment markets worldwide. As a leading producer of TiO2, what are some of the challenges and opportunities faced in the current supply/demand climate?
Titanium dioxide (TiO2) has no real substitutes and it is an essential ingredient in the products of our coatings, plastics and paper customers. The recent increase in demand for pigment, combined with the reduction in supply, has resulted in tight market conditions that stress the supply chain.
However, it`s not only the pigment market that is tight. The feedstock market is also struggling to match supply and demand. Environmental pressures in China, the desire by some countries to reduce exports and value add locally, and a general lack of investment have all resulted in a contracting supply base.
For Tronox, our goal is to be a Supplier of Choice for our customers and our strategy is to foster long-term relationships with our customers. In the current environment our priority is to guarantee a consistent high-quality supply to our existing customer base as opposed to being a ‘spot market’ supplier. The vertical integration we achieved after the acquisition of the Exxaro Mineral Sands business in 2012 ensures that supply/demand imbalances in the feedstock industry do not impact our output of TiO2 pigment.
The success of Tronox as a business depends on the success of our customers. We produce a critical input to their products and as such we will continue to do everything we can to ensure they are supplied in a continuous and cost efficient manner.
Your keynote presentation will focus on consolidation in the pigment market following the recent announcement of Tronox to acquire Cristal. Can you tell us the main drivers behind this decision?
The strategic rationale for combining our TiO2 businesses is very compelling and will create substantial value for our shareholders, customers, and employees. Cristal has world-class TiO2 operations that are highly complementary with Tronox's asset base. Together, we will form the world’s largest TiO2 producer and we will be the most highly integrated pigment and mineral sands producer in the world. It also expands our global footprint to six continents and increases our participation in faster-growing emerging markets. This is also an opportune time for this acquisition, as it allows both companies to broaden their customer bases and geographic presence, benefit from operational synergies, while expanding the degree of vertical integration that will enable lower cost production for the benefit of all stakeholders.
Our comprehensive two-day program aims to cover all aspects of the TiO2 Value chain. Can you share with us any particular topics you are looking forward to this year?
On the mining side of the TiO2 Value Chain, some key suppliers are facing issues such as depletion of their assets, environmental constraints, and economic viability of the capital required for exploration and expansion. Global production will be reduced if new projects are not initiated. As this limitation has a major impact on the mineral sands side of the business, it would be interesting to know what suppliers have in their plans.
What are the benefits of co-locating TiO2 World Summit with Pigment & Colour Science Forum?
It brings more people with the same interests together at the same time. This dialogue will result in a better understanding of the requirements and objectives of customers and suppliers. This is critical to generation of innovative ideas for new products or supply chain efficiencies.
Why is this conference important for TiO2 & Pigment industries?
This conference allows all of the participants in the TiO2 Value Chain to get information about the latest news in the industry. Efficiency supply chains can only exist if we can properly anticipate the demand of our customers and the challenges of our suppliers.
It also affords us the opportunity to meet with our customers and different stakeholders. It’s also a nice opportunity to learn about new projects and technology.
Jean-Francois will be presenting as part of the 'Pigment industry update' plenary session alongside representatives from Artikol and PPG. You can view the full programme here or book your ticket to join him here.