BP to halve US polybutene capacity with closure of Texas City plant

16 August 2001 13:01  [Source: ICIS news]

LONDON (CNI)--UK-headquartered energy and chemicals group BP announced on Thursday plans to close just over half its US polybutene production capacity.

It is to shut its 116 000 tonne/year plant at Texas City, Texas in the fourth quarter this year and consolidate North American production at its Whiting, Indiana refining and petrochemicals complex.

The closure, which follows a searching review of BP's global polybutene capacity and demand for its products, will affect about 30 employees at Texas City. BP said it hoped to provide alternative employment elsewhere within its Texas City complex.

The group confirmed to CNI that it had no plans to increase the 109 000 tonne/year polybutene capacity at Whiting but stressed that it would have sufficient production to supply all its North American customers.

In explaining the decision to close the Texas City plant, BP's polybutene global business manager Chris Clifton referred to a changing global supply and demand picture.

"BP's goal is to have a cost leadership position with the highest operational efficiency in the industry," he said. "This consolidation will enable BP's global polybutenes business to compete in a very dynamic environment and to ensure that our worldwide customers' needs are met now and in the future. We are continuing to invest in our polybutene facilities to position BP as a leading global supplier, fully able to respond to changing customer and market demands."

A similar rationale was delivered about two years ago when BP announced plans to close polybutenes output at Grangemouth in Scotland and 'consolidate' production at the company's 80 000 tonne/year facility at Lavera in southern France.

Polybutenes are used in the manufacture of dispersants for crank case lubricants and detergents for fuel additives, industrial lubricants, adhesives and sealants, cable filling compounds and a range of other industrial applications.

Today's announcement comes just nine days after BP outlined plans to cut costs in its overall chemicals business by $250m (Euro279m) a year and reduce projected capital expenditure by 20%, or $350m, by 2002. The cutback plans were disclosed following a virtual collapse in second quarter chemicals income.

By: Neil Sinclair
+44 20 8652 3214

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