About Kronos Worldwide

Kronos Worldwide, Inc. is a leading global producer and marketer of value-added titanium dioxide pigments, or TiO2, a base industrial product used in a wide range of applications. The company, along with its distributors and agents, sell and provide technical services for its products to approximately 4,000 customers in 100 countries with the majority of its sales in Europe, North America and the Asia Pacific region. The company has developed considerable expertise and efficiency in the manufacture, sale, shipment and service of its products in domestic and international markets. TiO2 is a white inorganic pigment used in a wide range of products for its exceptional durability and its ability to impart whiteness, brightness and opacity. TiO2 is a critical component of everyday applications, such as coatings, plastics and paper, as well as many specialty products such as inks, cosmetics and pharmaceuticals. TiO2 is widely considered to be superior to alternative white pigments in large part due to its hiding power (or opacity), which is the ability to cover or mask other materials effectively and efficiently. TiO2 is designed, marketed and sold based on specific end-use applications. TiO2 is the largest commercially used whitening pigment because it has a high refractive rating, giving it more hiding power than any other commercially produced white pigment. In addition, TiO2 has excellent resistance to interaction with other chemicals, good thermal stability and resistance to ultraviolet degradation. Pigment extenders, such as kaolin clays, calcium carbonate and polymeric opacifiers are used together with TiO2 in a number of end-use markets. TiO2 is considered a quality-of-life product. Markets for TiO2 are generally increasing in China, the Asia Pacific region, South America and Eastern Europe and these are significant markets, which will continue to grow as economies in these regions develop and quality-of-life products, including TiO2, experience greater demand. The company markets TiO2 in North America and Europe, its primary markets. The company offers its customers a broad portfolio of products that include over 40 different TiO2 pigment grades under the KRONOS trademark, which provide a variety of performance properties to meet customers’ specific requirements. The company’s major customers include domestic and international paint, plastics, decorative laminate and paper manufacturers. The company ships TiO2 to its customers in either a dry or slurry form via rail, truck and/or ocean carrier. Sales of the company’s core TiO2 pigments represented approximately 92% of its net sales in 2022. The company and its agents and distributors primarily sell its products in three major end-use markets: coatings, plastics and paper. Some of the principal applications for the company’s products include the following: TiO2 for Coatings – The company’s TiO2 is used to provide opacity, durability, tinting strength and brightness in industrial coatings, as well as coatings for commercial and residential interiors and exteriors, automobiles, aircraft, machines, appliances, traffic paint and other special purpose coatings. The amount of TiO2 used in coatings varies widely depending on the opacity, color and quality desired. In general, the higher the opacity requirement of the coating, the greater the TiO2 content. TiO2 for Plastics – The company produces TiO2 pigments that improve the optical and physical properties of plastics, including whiteness and opacity. TiO2 is used to provide opacity to items, such as containers and packaging materials, and vinyl products, such as windows, door profiles and siding. TiO2 also generally provides hiding power, neutral undertone, brightness and surface durability for housewares, appliances, toys, computer cases and food packages. TiO2’s high brightness along with its opacity, is used in some engineering plastics to help mask their undesirable natural color. TiO2 is also used in masterbatch, which is a concentrate of TiO2 and other additives and is one of the largest uses for TiO2 in the plastics end-use market. In masterbatch, the TiO2 is dispersed at high concentrations into a plastic resin and is then used by manufacturers of plastic containers, bottles, packaging and agricultural films. TiO2 for Paper – The company’s TiO2 is used in the production of several types of paper, including laminate (decorative) paper, filled paper and coated paper to provide whiteness, brightness, opacity and color stability. Although the company sells its TiO2 to all segments of the paper end-use market, its primary focus is on the TiO2 grades used in paper laminates, where several layers of paper are laminated together using melamine resin under high temperature and pressure. The top layer of paper contains TiO2 and plastic resin and is the layer that is printed with decorative patterns. Paper laminates are used to replace materials, such as wood and tile for such applications as counter tops, furniture and wallboard. TiO2 is beneficial in these applications because it assists in preventing the material from fading or changing color after prolonged exposure to sunlight and other weathering agents. TiO2 for Other Applications – The company produces TiO2 to improve the opacity and hiding power of printing inks. TiO2 allows inks to achieve very high print quality while not interfering with the technical requirements of printing machinery, including low abrasion, high printing speed and high temperatures. The company’s TiO2 is also used in textile applications where TiO2 functions as an opacifying and delustering agent. In man-made fibers, such as rayon and polyester, TiO2 corrects an otherwise undesirable glossy and translucent appearance. Without the presence of TiO2, these materials would be unsuitable for use in many textile applications. The company produces high-purity sulfate process anatase TiO2 used to provide opacity, whiteness and brightness in a variety of cosmetic and personal care products, such as skin cream, lipstick, eye shadow and toothpaste. In pharmaceuticals, the company’s TiO2 is used commonly as a colorant in tablet and capsule coatings, as well as in liquid medicines to provide uniformity of color and appearance. KRONOS purified anatase grades meet the applicable requirements of the CTFA (Cosmetics, Toiletries and Fragrances Association), USP and BP (United States Pharmacopoeia and British Pharmacopoeia) and the FDA (United States Food and Drug Administration). The company’s TiO2 business is enhanced by the following three complementary businesses, which comprised approximately 8% of its net sales in 2022: The company owns and operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term. Ilmenite is a raw material used directly as a feedstock by some sulfate-process TiO2 plants. The company supplies ilmenite to its sulfate plants in Europe. The company also sells ilmenite ore to third parties, some of whom are its competitors. The company also sells an ilmenite-based specialty product to the oil and gas industry. The company manufactures and sells iron-based chemicals, which are co-products and processed co-products of sulfate and chloride process TiO2 pigment production. These co-product chemicals are marketed through the company’s Ecochem division and are primarily used as treatment and conditioning agents for industrial effluents and municipal wastewater, as well as in the manufacture of iron pigments, cement and agricultural products. The company manufactures and sells other specialty chemicals, which are side-stream products from the production of TiO2. These specialty chemicals are used in applications in the formulation of pearlescent pigments, production of electroceramic capacitors for cell phones and other electronic devices and natural gas pipe and other specialty applications. Manufacturing, Operations and Properties The company produces TiO2 in two crystalline forms: rutile and anatase. Rutile TiO2 is manufactured using both a chloride production process and a sulfate production process, whereas anatase TiO2 is only produced using a sulfate production process. Manufacturers of many end-use applications can use either form, especially during periods of tight supply for TiO2. The company produced 492,000 metric tons of TiO2 in 2022. The company’s production volumes include its share of the output produced by its TiO2 manufacturing joint venture. The company’s average production capacity utilization rates were approximately 89% in 2022. The company operates facilities throughout North America and Europe, including the only sulfate process plant in North America and four TiO2 plants in Europe (one in each of Leverkusen, Germany; Nordenham, Germany; Langerbrugge, Belgium; and Fredrikstad, Norway). In North America, the company has a TiO2 plant in Varennes, Quebec, Canada and, through the manufacturing joint venture, a 50% interest in a TiO2 plant near Lake Charles, Louisiana. The company operates an ilmenite mine in Norway pursuant to a governmental concession with an unlimited term. In addition, the company operates a rutile slurry manufacturing plant near Lake Charles, Louisiana, which converts dry pigment primarily manufactured for it at the Lake Charles TiO2 facility into a slurry form that is then shipped to customers. The company has corporate and administrative offices located in the U.S., Germany, Norway, Canada, Belgium and France. TiO2 Manufacturing Joint Venture Kronos Louisiana, Inc., one of the company’s subsidiaries, and Venator Investments each own a 50% interest in a manufacturing joint venture, Louisiana Pigment Company, L.P. (LPC). LPC owns and operates a chloride-process TiO2 plant located near Lake Charles, Louisiana. The company and Venator share production from the plant equally pursuant to separate offtake agreements, unless it and Venator otherwise agree. Suppliers The company’s suppliers include Rio Tinto Iron and Titanium Ltd.; Eramet SA; Sierra Rutile Limited; Iluka Resources Limited; and Saraf Agencies Private Limited. Sales and Marketing The company’s marketing strategy is aimed at developing and maintaining strong relationships with new and existing customers. The company works to maintain close relationships with the key decision makers through in-depth and frequent contact. The company also works directly with its customers to monitor the success of its products in their end-use applications, evaluate the need for improvements in its product and process technology and identify opportunities to develop new product solutions for its customers. The company’s marketing staff closely coordinates with its sales force and technical specialists to ensure the needs of its customers are met, and to help develop and commercialize new grades where appropriate. The company sells a majority of its products through its direct sales force operating in Europe and North America. The company also utilizes sales agents and distributors who are authorized to sell its products in specific geographic areas. In Europe, the company’s sales efforts are conducted primarily through its direct sales force and its sales agents. The company’s agents do not sell any TiO2 products other than KRONOS branded products. In North America, the company’s sales are made primarily through its direct sales force and supported by a network of distributors. The company has increased its marketing efforts over the last several years in export markets and its sales are now made through its direct sales force, sales agents and distributors. In addition to its direct sales force and sales agents, many of its sales agents act as distributors to service its customers in all regions. The company offers customer and technical service to customers who purchase its products through distributors, as well as to its larger customers serviced by its direct sales force. The company sells to a diverse customer base with only one customer representing 10% or more of its net sales in 2022 (Behr Process Corporation – 10%). Competition The company’s principal competitors are The Chemours Company, Tronox Incorporated, LB Group Co. Ltd. and Venator Materials PLC. Research and Development The company employs scientists, chemists, process engineers and technicians who are engaged in research and development, process technology and quality assurance activities in Leverkusen, Germany. These individuals have the responsibility for improving its chloride and sulfate production processes, improving product quality and strengthening its competitive position by developing new products and applications. The company’s expenditures for these activities were approximately $15 million in 2022. Patents, Trademarks, Trade Secrets and Other Intellectual Property Rights The company has a comprehensive intellectual property protection strategy that includes obtaining, maintaining and enforcing its patents, primarily in the United States, Canada and Europe. The company also protects its trademark and trade secret rights and have entered into license agreements with third parties concerning various intellectual property matters. Patents – The company has obtained patents and have numerous patent applications pending that cover its products and the technology used in the manufacture of its products. The company’s patent strategy is important to it and its continuing business activities. In addition to maintaining its patent portfolio, the company seeks patent protection for its technical developments, principally in the United States, Canada and Europe. U.S. patents are generally in effect for 20 years from the date of filing. The company’s U.S. patent portfolio includes patents having remaining terms ranging from one year to 20 years. Trademarks and Trade Secrets – The company’s trademarks, including KRONOS, are covered by issued and/or pending registrations, including in Canada and the United States. The company protects the trademarks it uses in connection with the products it manufactures and sells and has developed goodwill in connection with its long-term use of its trademarks. Regulatory and Environmental Matters The company’s U.S. manufacturing operations are governed by federal, state and local environmental and worker health and safety laws and regulations. These include the Resource Conservation and Recovery Act, or RCRA, the Occupational Safety and Health Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic Substances Control Act and the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act, or CERCLA, as well as the state counterparts of these statutes. History Kronos Worldwide, Inc., a Delaware corporation, was founded in 1916. The company was incorporated in 1989.