Baltimore's SCM made a lead substitute

WHITER WHITES, SAFER PAINTS

November 11, 1993|By Kim Clark | Kim Clark,Staff Writer

An article in Thursday's Business section incorrectly reporte the date for a federal ban on lead in paint. The Consumer Product Safety Commission issued regulations in December 1976 banning all but traces of lead in paint.

The Sun regrets the errors.

It's the stuff in between the green in your dollar bills. It's the extra kick in whitewall tires.

And, if you have a house built after 1972, it's the reason you don't have to worry too much about your children eating paint flakes.

It is titanium dioxide -- the nontoxic white coloring agent that has replaced lead in paint -- and Baltimore's SCM Chemicals has been making it here for 60 years.

FOR THE RECORD - CORRECTION

To mark the occasion, the Baltimore Museum of Industry will open an exhibit today featuring the bittersweet legacy of one of the region's few remaining large and financially strong manufacturing plants.

For the neighbors of SCM's Hawkins Point plant, where more than 700 workers produce 120,000 tons of titanium dioxide a year, there is irony in the plant's success in making a safer paint coloring -- toxic pollution. Until the late 1980s, SCM leaked thousands of gallons a day of sulfuric acid into the Patapsco River. And the plant's smokestacks belched out thousands of pounds of noxious gases. Sometimes, the chemical clouds were so thick that they blinded drivers on the Key Bridge and caused accidents.

But for parents in Baltimore, where about 2,000 children each year are poisoned by flakes of old lead-based paints, titanium dioxide has been a godsend. (Lead paint was banned in Baltimore in the 1950s, and nationwide in 1972.)

For SCM's owner, London-based Hanson PLC, the worldwide titanium dioxide operations based in downtown Baltimore have been extremely profitable. The SCM Chemicals division of Hanson had sales of $818 million last year. Although the company won't discussprofits, the New York investment firm Goldman, Sachs estimated that about 11 percent of Hanson's profits, more than $100 million, came from SCM's titanium dioxide production.

SCM has provided a steady living for the 900 Marylanders on the payroll, which includes headquarters staff and more than 100 employees at another paint coloring plant in Baltimore.

Alfred Sams, a maintenance worker at the Hawkins Point plant and a member of the United Steelworkers Union grievance committee, says that although he is sometimes pitted against SCM managers in union matters, he said thinks SCM is a good employer.

The company has had no layoffs in more than a decade and has been expanding in recent years.

The Hawkins Point plant's 460 unionized workers earn about $15 an hour and receive good benefits, so most workers stay until retirement. The company's Maryland payroll last year topped $38 million.

Not everyone was so high on SCM just a few years ago. Since 1933, when what was then called the Glidden paint plant in St. Helena started mixing black ilmenite ore into vats of sulfuric acid to make gleaming white titanium dioxide powder, the company has had trouble disposing of its toxic byproducts.

(In 1986, Hanson bought Glidden, which had built a second titanium dioxide plant in Hawkins Point in 1956. Hanson later sold the paint operations but kept the SCM chemical operations.)

But just as the company moved to fix its environmental problems, by adopting a technique that used chlorine instead of sulfuric acid, and adding scrubbers to its smokestacks, SCM was hammered by a downturn in the economy. The boom years of the 1980s, when supplies of titanium dioxide were so short that SCM could charge record highs of $1.20 a pound and still had to ration supplies to its customers, ended in 1990.

The recession slashed everything from home construction to demand for new cars to magazine size -- reducing the need for the material used in paints and paper dyes. Prices fell to 85 cents a pound or so, and SCM hunkered down, waiting for a rebound in the economy.

"We make a quality-of-life product," said Lou Kistner, a spokesman for SCM. "When times are good, there is more demand for titanium dioxide because people are buying houses, more magazines, everything."

And as the economy improves, Mr. Kistner said, demand and prices are improving, but even SCM executives say it will be a long haul.

Because profits were so good in the 1980s, many companies, including SCM, built or expanded plants, Mr. Kistner said, and now there is capacity to make more titanium dioxide than the world needs.

But SCM expects to benefit from the coming shakeout. SCM was able to make money even in the trough of the recession, "and we are always looking for ways to grow our business," Mr. Kistner said.

Industry observers say that although SCM will continue to suffer through classic commodity pricing cycles -- periods of abundance and low prices leading to scarcity and high prices -- SCM will likely continue to prosper.

Even during a bad year like last year, the company's gross profit margin was 17 percent, noted Laurence C. Baker, who follows Hanson for Baltimore's Legg Mason Wood Walker.

SCM has surpassed larger competitors like DuPont in converting to the cleaner chloride-based manufacturing processes, and as a result "they are the low-cost producer," Mr. Baker said.

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