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Plant Closure Provisions

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Plant Closure Provisions

Note 13.    Plant Closure Provisions

The Company has continuing plans to close some of its manufacturing facilities at sites around the world as and when those operations are expected to be decommissioned. The liability for estimated closure costs of Innospec’s manufacturing facilities includes costs for decontamination and environmental remediation activities (“remediation”).

As a result, the principal site giving rise to remediation liabilities is the manufacturing site at Ellesmere Port in the United Kingdom, which management believes is the last ongoing manufacturer of TEL. There are also remediation liabilities on a much smaller scale in respect of our other manufacturing sites in the U.S. and Europe.

Movements in the provisions are summarized as follows:

(in millions)		2020				2019				2018
Total at January 1		$	49.3			$	49.5			$	46.1
Charge for the period excluding restructuring			5.1				4.4				6.8
Restructuring (see Note 5)			7.5				0.0				0.0
Utilized in the period			(4.1	)			(4.4	)			(3.1	)
Exchange effect			0.7				(0.2	)			(0.3	)
Total at December 31			58.5				49.3				49.5
Due within one year			(6.6	)			(5.6	)			(5.9	)
Due after one year		$	51.9			$	43.7			$	43.6

Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date. Remediation costs are recognized in cost of goods sold.

The provisions for remediation represent the Company’s liability for environmental liabilities and asset retirement obligations. The charge for the period in 2020 represents the accretion expense recognized of $3.7 million and a further $1.4 million primarily in respect of changes in the expected cost and scope of future remediation activities.

The Octane Additives segment ceased trading and is no longer a reporting segment from July 1, 2020. As a result, there has been a one-off charge of $7.5 million for the restructuring activities related to the legacy production of TEL for use in motor gasoline.

We recognize environmental liabilities when they are probable and costs can be reasonably estimated, and asset retirement obligations when there is a legal obligation and costs can be reasonably estimated. The Company has to anticipate the program of work required and the associated future expected costs, and comply with environmental legislation in the countries in which it operates or has operated in.

Remediation expenditure utilized provisions of $4.1 million, $4.4 million and $3.1 million in 2020, 2019 and 2018, respectively.

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- References

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- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 420
-URI http://asc.fasb.org/topic&trid=2175745

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