Last US Nitrocellulose Producer Will Phase Out Business

Hercules Inc. (Wilmington, DE) will phase out production and sale of nitrocellulose at its Parlin, NJ, facility. The company plans to begin tapering off nitrocellulose production in February 2000 and close the line in September 2000. Approximately 300 workers will lose their jobs. Hercules plans to record a fourth quarter 1999 charge to cover costs associated with ending nitrocellulose production.

The company will continue to produce Natrasol hydroxyethylcellulose (HEC), a paint thickener, at the Parlin facility, employing about 100 workers. Hercules also makes HEC in Virginia and the Netherlands.

"Despite a significant internal effort to reduce our production costs," says Hercules Aqualon Div. GM Monika Riese-Martin, "the persistent over-capacity of the global nitrocellulose market has made this a nonviable business for Hercules."

The company tried to save the business by bringing in consultants to find ways to wring costs from the process or upgrade the material. The company was foiled by the commodity nature of nitrocellulose. It is made by reacting wood pulp cellulose with nitric acid. The process is simple, its economics driven by access to cheap wood pulp cellulose.

Nitrocellulose finds wide use as a film forming agent in furniture lacquers, printing inks, and nail polish. Other grades are primary ingredients in smokeless propellants for military and commercial applications.

By Alan S. Brown