Albemarle to save in BR

• By GARY PERILLOUX
• Advocate business writer
• Published: May 15, 2008 - Page: 1D - UPDATED: 12:05 a.m.

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Albemarle Corp. wants to boost its revenue 38 percent by 2010, and the company expects to save $2 million a year by moving its headquarters from Richmond, Va., to Baton Rouge, company officials said in separate presentations this week.

John Steitz, the specialty chemical company’s chief operating officer, presented Albemarle’s Vision 2010 to the Baton Rouge Rotary Club on Wednesday, detailing an annual sales target of $3.22 billion by 2010, up from $2.34 billion last year.

On Tuesday, Steitz and other Albemarle executives met with 50 analysts and investor representatives at a conference in Houston, where Chief Financial Officer Richard Diemer told the group a headquarters move from Richmond to Baton Rouge would result in $2 million in annual savings beyond the incentives guaranteed by the state.

Two weeks ago, Gov. Bobby Jindal announced the relocation of Albemarle’s headquarters to Baton Rouge, where the company already employs more than 600. About 30 executives and support staff with an annual payroll of $7 million will leave Richmond by summer for Louisiana.

To secure the prestige and economic benefits of adding a second Fortune 1000 headquarters to Baton Rouge (joining Fortune 500 member The Shaw Group), the state offered $3.2 million from the Governor’s Rapid Response Fund to defray relocation expenses. East Baton Rouge city-parish government committed $1 million and a state Quality Jobs incentive program that rebates a portion of payroll taxes for well-paying jobs runs the total incentive package to about $6.9 million.

An LSU economic impact study projected the headquarters move would create $27 million a year more in state sales, $10.7 million more in earnings and 161 new direct and indirect jobs in the first year.

On Wednesday, Steitz said the $2 million a year Albemarle will save from the move comes from reduced travel expenses, dropped leases in Richmond, and other reduced administrative costs.

Before the headquarters decision, the company had announced about $26 million in capital expenditures in Baton Rouge, some of them associated with the move. Albemarle is completing a $20 million expansion of its Process Development Center, a research, development and production facility near ExxonMobil in Baton Rouge.

It’s also renovating 10 floors in the Chase Tower South for about $6 million.

At the same time, the company is embarking on Project One Albemarle, a cost-efficiency strategy that aims to save $40 million a year in general administrative and corporate costs by 2010, compared with those current costs.

Diemer said Tuesday the company’s growth — including a key 2004 acquisition of Dutch company AkzoNobel’s petroleum catalysts business — has generated a soon-to-be $3.2 billion company running on a $1 billion chassis: Albemarle’s corporate structure is inefficiently organized to carry its new weight.

In addition to the Baton Rouge move, cost-saving measures include closing a Singapore office and moving it to Shanghai, where Albemarle operations are increasing in China; and consolidating multiple European offices into one administrative site, something not finalized, Steitz said after the Rotary meeting.

“Here, we have a tremendously bright future,” Steitz said to thunderous applause from several hundred Baton Rouge Rotarians.