Westlake shuts PVC pipe plant amid excess supply
Westlake Chemical said on Thursday that its subsidiary North American Pipe has shut down its polyvinyl chloride (PVC) pipe production facility in Springfield, Ky., in an effort to reduce costs and optimize production operations amid 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, the company said.
Westlake also said that its facility in Lake Charles, Louisiana, suffered from unscheduled second-quarter outage caused by a weather-related power failure, resulting in reduced production and repairs at an ethylene unit.
The company said 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.
Westlake said it expects proceeds from insurance recoveries to offset a majority of this impact in future periods. The unit has returned to normal operations.
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