Westlake to rationalize certain North American chlorovinyl and styrene assets
Westlake Corporation announced that the company has approved a plan to cease operation of certain of the company’s North American chlorovinyl production facilities, including:
- its polyvinyl chloride (PVC) plant at the Aberdeen, Mississippi site, which has an annual capacity of approximately 1 billion pounds of suspension PVC resin;
- its vinyl chloride monomer (VCM) plant at the Lake Charles, Louisiana North site, which has an annual capacity of approximately 910 million pounds of VCM
- one of its diaphragm chlor-alkali units at the Lake Charles, Louisiana South site, which has an annual capacity of approximately 825 million pounds of chlorine and 910 million pounds of caustic soda.
The Company plans to continue supplying customers with PVC, VCM and chlor-alkali products from its seven other North American chlorovinyl facilities. Following the closures, the Company expects to have aggregate annual production capacity of approximately (i) 5,520 million pounds of suspension PVC globally, including 4,900 million pounds in North America, (ii) 7,630 million pounds of VCM globally, including 6,050 million pounds in North America, and (iii) 6,680 million pounds of chlorine and 7,510 million pounds of caustic soda globally, including 5,410 million pounds of chlorine and 6,100 million pounds of caustic soda in North America.
The Company also approved a plan to cease operation of its styrene production plant located at the Lake Charles, Louisiana site, which has an annual production capacity of approximately 570 million pounds of styrene.
Cessation of operations at the affected facilities is expected to take place in December 2025. The closures of the facilities are expected to result in a workforce reduction of approximately 295 employees. The Company expects it will incur total pre-tax costs of approximately $415 million related to the closures of the facilities consisting of noncash accelerated depreciation, amortization, and asset write-off charges of approximately $357 million, employee severance and separation costs of approximately $25 million, and other plant shut down costs of approximately $33 million.
“Given the persistent, challenging market conditions facing the global commodities chemicals industry, as part of our evaluation of business operations, we have made the difficult decision to cease operation of three units within our North American Chlorovinyls business and cease operations of our Styrene manufacturing unit, located in Lake Charles, Louisiana. We will continue to supply our chlorovinyl customers with products produced at our other North American Chlorovinyls manufacturing facilities,” said Westlake President and Chief Executive Officer Jean-Marc Gilson. “I want to recognize the dedication and contributions of all our employees, including the ones who will be leaving us. We appreciate their contribution over the years. We are committed to treating everyone impacted with respect and our focus is on supporting them through their transition.”
The Company expects to recognize a substantial portion of the non-cash accelerated depreciation, amortization, and asset write-off charges, employee severance and separations costs, and other plant shut down costs in the fourth quarter of 2025, although cash outflows are expected over several years through the completion of the anticipated closures.
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