Norit N.V., which among other things makes activated carbon for control of mercury from coal-fired power plant stacks, announced March 19 that it has filed a registration statement on Form F-1 with the SEC relating to a proposed IPO for its ordinary shares.
The number of shares to be offered and the price range for the offering have not yet been determined. The company said it intends to use the net proceeds from the offering to repay debt and for working capital and other general corporate purposes. Goldman, Sachs & Co. and Deutsche Bank Securities Inc. are acting as joint bookrunners for the proposed offering.
Norit is a global leader in the research, development, manufacturing and sale of high-grade activated carbons used in a growing range of environmental, health, safety and industrial applications. Building on its more than 90-year history of innovative product development, the company produces a diverse array of products with over 150 different activated carbon formulations engineered from a wide range of raw materials including lignite coal, peat, bituminous coal and wood.
“We have seen increasing demand for our activated carbon, particularly in the coal-fired utilities industry in recent years, and we expect this to continue as a result of additional environmental, health and safety concerns and related regulations,” said the Form F-1. “According to industry reports published by Roskill Information Services Ltd., or Roskill, in 2008, and by Chemical Economics Handbook—SRI Consulting, or CEH, in 2010, the use of activated carbon in controlling mercury emissions could become the largest end market for activated carbon in North America over the next several years. We expect that federal, state and provincial regulations governing mercury emissions from coal-fired utilities in the United States and Canada will drive accelerated demand growth in this market.”
For instance, the U.S. Environmental Protection Agency in December 2011 signed a final rule implementing the Mercury and Air Toxics Standards (MATS) for power plants that will reduce emissions from new and existing coal- and oil-fired electric utility steam generating units of heavy metals, including mercury, the company noted.
When proximity to raw materials is strategically advantageous, Norit said it has set out to build production facilities that are located in close proximity to key raw material sources, in particular lignite. In 2010, Norit renewed the agreement with the supplier of lignite to its Marshall, Tex., facility and it has a strategic long-term lignite supply agreement with a joint venture counterparty in Canada that extends until at least 2021.
In addition to lignite contracts with third-party suppliers, in 2009, Norit acquired all of a former joint venture partner’s interest in existing leases to lignite reserves near Marshall, Tex., where it is currently developing its own lignite mine. “We expect the new lignite mine, which we expect will begin operations in 2014, will help ensure a reliable, cost-effective supply of one of the most important raw materials for our mercury removal activated carbons and hence reduce our reliance on external suppliers going forward,” the Form F-1 said.
Norit expanded production capacity at its largest facility in Marshall by about 37% with the addition of a new production line in 2009 to meet rising demand for mercury removal solutions. The production capacity increased by about 27% in 2011 with the addition of another new production line in Marshall. In addition, four additional production lines for the Marshall facility have received permitting approvals. In total, Norit estimates that these four new lines would approximately double production capacity at the Marshall facility. In 2010, Norit completed construction of its Canadian joint venture facility near the U.S. border, at Bienfait, Saskatchewan, with one initial production line, and has secured permitting approvals for expansion to a total of up to four additional production lines as needed to meet demand.
Norit works with Sherritt in Canada
Norit is a party to a 50%-owned joint venture with Prairie Mines & Royalty Ltd., a wholly owned subsidiary of Sherritt International Corp., Canada’s largest steam coal producer, with a production facility in Canada, or the Bienfait JV. The agreement also includes a long-term contract with the joint venture counterparty to supply the Bienfait JV with high quality lignite at cost for the continuing expansion of production in Canada. Norit also has an option under this agreement to buy an additional 1% to achieve 51% ownership of the joint venture.
The U.S. Mine Safety and Health Administration database shows Norit N.V. as the parent of Norit Americas Inc., which has listed under it the abandoned Darco strip lignite mine in Marshall County, Tex. The mine was first listed with MSHA under Norit Americas in 1985, and was listed before that under ICI Americas Inc. The Darco mine last produced coal in 2001, when it turned out 228,371 tons, according to MSHA data.
Norit began production of activated carbon in Zaandam, The Netherlands in 1918 as N.V. Algemeene Norit Maatschappij. In 1924, it acquired an activated carbon production facility at Klazienaveen, The Netherlands. In 1933, it formed American Norit Inc. to produce and sell activated carbon in the U.S. In 1985, it acquired a production plant and lignite mine in Marshall, which had been operational since 1922.
The Norit Group historically had two divisions, Activated Carbon and Clean Process Technology (CPT). The CPT business developed purification components and equipment for the water and beverage industries and was sold in May 2011 to a wholly owned subsidiary of Pentair Inc. As of May 2011, Norit is a global purification company focused solely on activated carbon.