Innophos Secures Long-Term Viability of Geismar Phosphoric Acid Facility

CRANBURY, N.J., Jan. 12, 2017

As part of the Settlement, Innophos will pursue implementation of "Deep Well Injection", a customary process approved by the Government Parties by which Innophos would handle a separated co-product (referred to as "Raffinate").  This solution allows the Company to continue its current PPA operation in Geismar, while satisfying the outstanding environmental concerns raised in 2008 by the Government Parties.  The Settlement also confirms several proactive and voluntary improvements previously made to the Geismar facility to address these environmental concerns, further demonstrating the Company's commitment to environmental stewardship at its facilities.

Kim Ann Mink, Chief Executive Officer of Innophos, commented, "We are committed to supporting our Phosphoric Acid customers' needs and believe that the terms of this settlement position us to be able to do so by securing the long-term viability of our Geismar PPA plant.  We believe that the agreed upon solution addresses all environmental concerns with minimal effect on our business and operations."

Joshua Horenstein, Vice President and Chief Legal Officer of Innophos, added, " While we stand behind our long-term assertion that our operations at the Geismar facility are in full compliance with all applicable federal and state laws and regulations, this negotiated solution is fair for the public and the Company.  As a company committed to environmental protection at our facilities, we are glad to address all of these alleged issues at our Geismar facility by proactively working with the government."

Innophos recently received a permit from the Louisiana Department of Natural Resources ("LDNR") to begin construction of its Deep Well Injection System, which began in late 2016 and is expected to be completed by early 2018.  The Company estimates that the capital expenditure for the Deep Well Injection System will be $16 million, consistent with the range previously disclosed in SEC filings from 2011 - 2013.  The majority of this cost is expected to take effect in 2017, with approximately $2 million of preliminary engineering and equipment investments completed in 2016.  This is consistent with Innophos' expectations and was reflected in the Company's most recently issued 2016 guidance on capital expenditures.  

In negotiated settlements leading to consent decrees with the Government Parties, it is common for penalties relating to previous "non-compliance" to be assessed.  As a result, and consistent with the Company's most recently disclosed expectations, Innophos has agreed to a penalty in the amount of $1.4 million, which was previously fully accrued by the Company. 

About the Company