Summit Minerals Establishes
Savannah International Terminal, LLC
New company will export Georgian Kaolin Clay; Possible Expansion
of Terminal to Include More Products
Summit Minerals LLC established Savannah International Terminal
LLC (SIT) in May 2005 to provide the transportation and logistic
capabilities to move Georgia Kaolin clay from the U.S. to key customers
in Japan and China.
Previously, this function was provided by one of Summit Minerals’
contractors, Southern Bulk Industries (SBI), who had taken a loan
from SCOA in 2003 to improve the facility as well as management
of their business and property in Savannah, Georgia. Summit Minerals
had been working with Southern Bulk Industries since 1992.
But despite the loan and improvements from SBI, SCOA decided to
exercise an option to acquire the assets of the company. The assets
include the warehouse and slips for ships to dock and load in the
Savannah harbor. The new company is 80 percent owned by Summit Minerals,
with SBI having a 20% stake..
“When we financed the loan we made a clause to make sure
that if Southern Bulk Industries did not do well, our intention
would be to acquire the terminal because logistics are very important
to our customers and our profitability,” explained Koh Akiyama,
Summit Minerals, who is the Chief Financial Officer of Savannah
International Terminal LLC.
The chief executive of SIT is, Anders Kroglund, who has been with
SIT from the beginning on May 27. He has worked as a consultant
with Summit Minerals for 14 years. As Chief Financial Officer, Akiyama
will split his time between Summit Minerals headquarters in Fort
Lee, NJ and Savannah.
Kaolin Clay
Kaolin clay is widely used in the printing process to put a glossy
shine on printed pieces. For many years, Summit Minerals has provided
this special clay to key customers who use it for paper coating
and ceramic clay. The clay is also used in plastic, paint and rubber
products.
Like many minerals, it is a high volume, low margin product. Presently,
the going rate for the clay is about $100 dollars per metric ton.
The logistics of getting the clay to customers costs nearly as much
as the clay does.
“Managing the logistics of the business is the key to profitability,”
explained Akiyama. “It is also important for us to manage
the supply chain, when the orders are coming in and going out.”
Though it has wide use in a multitude of products, kaolin clay
is only known to be found in large quantities in parts of Georgia
and the country of Brazil. The world market receives several million
tons a year from central Georgia, where it is mined and processed
before being shipped by rail car to the terminal 150 miles away
in Savannah. More than 90 percent of clay exports from the U.S.
go through the port at Savannah.
The Savannah Port
The port of Savannah is the fourth largest harbor on the east coast
of the United States. In addition to the terminal where the clay is stored and prepared
for delivery, Savannah International Terminal has a 38 foot wide
slip in the harbor that can handle HandyMax type vessels.
Once Savannah International Terminal receives the clay by rail
after it has been mined and processed in central Georgia, they then
bag, store and ship it overseas. The terminal stores about 25,000
to 30,000 metric tons of the clay at any one time and they completely
turn over their inventory of kaolin clay four times in the average
month.
The major customers of Summit Minerals and Savannah International
Terminal are Nippon Paper, who has been a customer for 30 years,
and Hokuetsu Paper.
The Savannah port is growing in terms of cargo and Savannah International
has already received inquiries from paper companies and other product
manufacturers about potentially expanding their terminal space to
handle more products.
Because of this, Summit Minerals are looking into products like
refractory chemicals and Titanium sand. This would require an expansion
of the warehouse as the minerals that Summit Minerals and Savannah
International Terminal would deal in would be similar to that of
clay,- high bulk, low margin.
Currently, Savannah International Terminal has 52 employees at
the terminal with the majority, 48, working in the factory.
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