Tioxide is paying dollars 200m ( pounds 138m) for a 50 per cent stake in a plant at Lake Charles, Louisiana, recently built by Kronos, a subsidiary of the US tioxide specialist NL Industries. The deal is subject to regulatory approval.
The joint venture means Tioxide has suspended its plans to build a plant in Becancour, Quebec, and will close part of its operation at Tracy, also in Quebec, with the loss of 60 jobs.
The group began construction at Becancour six months ago and it was due to be operational in 1995. Tioxide has already spent dollars 30m of the budgeted dollars 150m on the plant, which would have had capacity of 60,000 tonnes a year compared with 100,000 at Lake Charles.
The Becancour plant was planned because of concern about waste discharges from Tracy, which uses sulphate rather than the cleaner chloride technology.
Alan Pedder, Tioxide's chairman and chief executive, said: 'We had hoped to maintain our North American presence by continuing to run Tracy until 1994, but it became clear that this arrangment did not have the approval of the environmental authorities.'
Brian Thomas, Tioxide's planning manager, said the plans had simply been mothballed and the plant might still be built if demand for tioxide improved. It has been badly hit by the recession.
Mr Thomas added that the joint venture would give Tioxide immediate access to the product, eliminating a two-year wait for construction at Becancour. It would also give it access to Kronos's chloride technology, which Tioxide has been developing for itself at a pilot plant.
Tioxide is the largest producer of titanium dioxide in Europe, and exports some of its produce to the US, where it has an 8 per cent share of the market.