Firm weighs expansion of city plant

Chemical company seeks incentives from city, state

Factory's future at risk

Millennium looking at other sites to meet demand for pigment

Manufacturing

September 27, 2000|By Kristine Henry | Kristine Henry,SUN STAFF

Millennium Inorganic Chemicals is weighing whether it should invest millions of dollars in its southern Baltimore manufacturing plant or in other facilities elsewhere to meet rising demand for its titanium dioxide pigment.

Executives of the Hunt Valley company are talking with state and city officials to see what incentives might be available to expand its 430-employee Hawkins Point plant. Should the company decide not to invest in the Hawkins Point plant, its future could be endangered.

"A lot of governments and a lot of work forces around the world want us to invest at their sites," said Robert E. Lee, president and chief executive of Millennium Inorganic.

A decision to invest elsewhere would not bode well for the 45-year-old Baltimore plant, which is split about 50-50 between old and new technologies, Lee said.

"I would never say it would be the beginning of the end," he said. "But would [workers] be looking over a cliff? Absolutely."

The Baltimore plant produces about 99,000 tons of the white pigment each year, which accounts for about 13 percent of Millennium's production worldwide. Titanium dioxide is used in everything from trash bags to toothpaste to the letters on M&Ms.

Besides the Baltimore facility, Millennium has titanium dioxide plants in Ohio, France, the United Kingdom, Australia and Brazil.

The Brazilian government, Lee said, has already offered to forgo state and federal income taxes for the next 10 years if Millennium chooses to make its upgrades at that facility. Workers at the Brazilian plant, he said, make about $20,000 a year. The average base pay at the Hawkins Point facility is about $40,000 and can reach more than $60,000 with overtime.

But, Lee said, workers here tend to be better educated and more productive, so the savings on wages in other countries "is not as much as you might think."

Still, to keep the Baltimore plant competitive, local officials "have to help us in any way they can," Lee said.

Richard C. Mike Lewin, secretary of the state Department of Business and Economic Development, said his agency has been in talks with Millennium about the Baltimore facility since April.

"The economic health of South Baltimore is very important to us," Lewin said.

Millennium may be eligible, Lewin said, for tax credits or aid under the new One Maryland program, which tries to help areas that have lagged wealthier parts of the state.

"We are still talking," Lewin said, "and we are competing as aggressively as we can."

Millennium Inorganic is a subsidiary of New Jersey-based Millennium Chemicals Inc. and made up about 78 percent of the parent company's 1999 sales of $1.6 billion.

Company executives are considering a range of possibilities in order to get the 55,000 to 110,000 tons of additional titanium dioxide manufacturing capacity it will need within the next five years. It could spend hundreds of millions to refashion the Hawkins Point plant into a state-of-the-art facility; it could spend tens of millions to make piece-by-piece improvements; it could decide to improve one of its other plants; or it might build a plant in China.

Al Sams, president of the local United Steelworks union that represents Hawkins Point employees, said he thinks the Baltimore plant will receive only modest improvements.

"All different [parts of the company] are vying for the money," he said.

The United States makes up the largest portion of the titanium dioxide market - about one-third - but demand is growing rapidly in Asia, which is beginning to rebuild after its recent economic crisis.

The local union recently signed a three-year agreement with Millennium that both sides hope will make the Baltimore plant more competitive. Under the new contract, workers will be trained in more than one area in return for across-the-board wage increases and extra pay for learning additional skills.

"I feel really good about it," Sams said. "It's a 100 percent win; it's making you more marketable in the industry and it gives the company greater assets in individuals who can do multitask jobs."

Millennium Chemical's stock was up 6.25 cents yesterday to close at $13.75.

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