Kentucky PVC pipe production facility shuttered
Westlake Chemical Corp.’s North American Pipe Corp. subsidiary has shut down its Springfield, Kentucky, PVC pipe production facility in an effort to reduce costs and optimize production operations as a result of excess capacity in the PVC pipe market. The Springfield site is one of the company's smallest pipe facilities. Customers currently being serviced from Springfield will not experience any supply disruption and will now be served through North American Pipe's other PVC pipe plants. Impairment and shutdown-related costs are expected to negatively impact second quarter 2011 pre-tax earnings by approximately $4 million.
During the second quarter of 2011, Westlake Chemical’s Lake Charles, Louisiana, facility was also negatively impacted by an unscheduled outage caused by a weather related power supply failure from a third party power provider, resulting in reduced production and repairs at an ethylene unit. Westlake Chemical estimates that the lost production, repair costs and other expenses resulting from this event will lower second quarter 2011 pre-tax earnings by approximately $10 million. However, the company says proceeds from insurance recoveries will offset a majority of the impact in future periods. The unit has returned to normal operations.
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