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MAJOR EUROPEAN FOREST CHEMICALS FIRM BRINGS TOFA (TALL OIL FATTY ACIDS) TO U.S.; GENEROUS SUPPLY OF CTO (CRUDE TALL OIL) FROM RUSSIA SPURS ENTRE

MAJOR EUROPEAN FOREST CHEMICALS FIRM BRINGS TOFA (TALL OIL FATTY ACIDS) TO U.S.; GENEROUS SUPPLY OF CTO (CRUDE TALL OIL) FROM RUSSIA SPURS ENTRE
 MERCHANTVILLE, N.J., Jan. 21 /PRNewswire/ -- Although foreign providers of similar commodities have historically fled U.S. markets when prices drop, Veitsiluoto Oy of Finland made a significant commitment this month contracting with New Jersey-based Technichem, Inc. to distribute 10 million pounds of TOFA (a component of household cleaning materials, paint and chemical intermediates) in 1992.
 The first shipment has arrived at Newark, N.J., and will be stored there for regional distribution. Said Technichem President Michael Fegan, "European TOFA is technically unique and the logistical advantage of a Newark-based distribution center provides an economic advantage to Northeast companies buying from Southern producers."
 Veitsiluoto Oy, the second largest fractionator in Europe, negotiated long-term supply contracts with a number of Russian kraft sulfate pulp mills when Perestroika opened that market. The new sources, in conjunction with the ample supply of CTO in Europe, created an opportunity to introduce these products to North America where market analysts forecast a shortage of 600 million pounds by 1994.
 Technichem, located in Merchantville, was chosen as sole distributor after a careful screening process. Since the large U.S. suppliers of TOFA are primarily located in the South, the Veitsiluoto/Technichem agreement stands to provide Northeast U.S. customers with easy access to northern TOFA at highly competitive prices.
 European product, derived from northern pine, features some advantages over most domestic TOFA. Oulu 102, Veitsiluoto's trade name for their TOFA, is 1.5-2.5 percent rosin acid content. The isomer distribution is slightly different than TOFA from southern pine, giving alkyd resin producers a more highly cross-linked, faster drying product with superior anti-yellowing characteristics. In addition, these products carry ISO-9000 approval, a quality assurance standard common to European suppliers but yet to be available from domestic vendors.
 CTO, a byproduct of the kraft paper production process, is used to produce TOFA as well as rosin and distilled tall oil. Supply in the United States has always been in a delicate balance because of the limited quantity of CTO available. Although TOFA prices are currently soft, the use of more hardwood and recycling in the paper manufacturing industry forecasts a long-term drop in available CTO from U.S. sources.
 The market for TOFA in the United States is an estimated 500 million pounds, and the Finnish firm has a distillation capacity of 200 million pounds. The Veitsiluoto/Technichem contract has targeted distribution of various tall oil derived products to the Northeast United States. TOFA and alpha pinene are currently available; rosin derivatives will be available later this year.
 /delval/
 -0- 1/21/92
 /CONTACT: Michael Fegan, president of Technichem, 609-486-0060/ CO: Technichem, Inc.; Veitsiluoto Oy ST: New Jersey IN: CHM SU: CON


MK-KA -- PH036 -- 2045 01/21/92 16:33 EST
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Date:Jan 21, 1992
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