Arizona Chemical sells stake in Arboris LLC

01/12/2012

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Jacksonville-based Arizona Chemical Co., which operates a tall oil bio-refinery and technology center in Savannah, has sold its stake in Arboris LLC’s adjacent sterols plant here.

“Arboris has experienced global growth in recent years, and they approached us about

selling our share in the business,” said Gary Reed, vice president for operations for Arizona Chemical.

Arboris and Arizona Chemical entered into a joint venture in 2001. Arboris owned the emerging technology to manufacture phytosterals — a pine tree extract used in cholesterol-reducing drugs — while Arizona Chemical produced the raw materials needed for the process.

As part of the agreement, Arboris would build its plant on land owned in Savannah by Arizona Chemical. In return for a free lease and staffing of the facility, Arizona Chemical received a 10 percent interest in the business and became its exclusive supplier.

The arrangement worked well for almost 10 years but ran into a major roadblock in 2010, when Arboris filed a federal antitrust lawsuit against Arizona Chemical, alleging its partner was trying to gain access to Arboris’ technology for its own profit.

The lawsuit was voluntarily dismissed by Arboris in December 2010.

In its Monday announcement, Arizona Chemical said it has sold both its ownership stake and the land associated with its Savannah sterol operation to Arboris, which also will assume responsibility for its operations in Savannah, terminating Arizona Chemical’s agreement to operate the Savannah sterol plant.

“A key component for both Arboris and Arizona Chemical is the extension of the supply agreement between the two parties,” Reed added. “As part of the deal, the supply agreement will be extended, and we will execute a services agreement to continue to provide critical services to the Arboris operation.”

The deal closed on Dec. 31, and Arboris, also based in Jacksonville, will assume responsibility for operating the Savannah sterols plant in the first quarter of 2012.

When Arboris assumes operations responsibility, Arizona Chemical will cut fewer than 25 positions in Savannah.

“We will meet with the unions to negotiate the effects of this decision immediately,” Reed said. “While they are under no obligation to do so, Arboris has indicated that they will give ample consideration to the trained and talented staff who have been working at the sterol plant.”

Arboris expects to begin interviewing applicants this month.

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Arizona Chemical sells stake in Arboris LLC

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