INEOS ChlorVinyls to close Wales PVC facility on weak demand

23 February 2010 16:50  [Source: ICIS news]

LONDON (ICIS news)--Major European polyvinyl chloride (PVC) producer INEOS ChlorVinyls will close its Barry facility in Wales, UK, as a result of ongoing low demand, the company said on Tuesday.

The site, which has a nameplate capacity of 125,000 tonnes/year, would be closed as part of a, “consolidation of UK PVC production, [which] is expected to take place by the end of Q2 2010 at the latest.”

INEOS' statement said that customers would continue to be supplied from the two remaining sites of Runcorn and Newton Aycliffe in the UK.

“The company aims to deliver the plant closure with minimum loss to any of the permanent employees,” it said.

“The consolidation of our PVC operations will underpin security of supply to our UK customers whilst at the same time delivering an improved cost base,” said business manager Gier Tuft.

“We have had to take the difficult decision. PVC demand is poor and margins are unsustainable – there is a significant lag between feedstock costs and PVC prices,” added another source close to PVC production at the company.

This was echoed by several producers in the market.

“Profits are at extremely low levels. Many PVC producers are writing in red figures. It simply cannot go on like this or many will not survive,” one producer added.

However, an INEOS consumer said: “This facility [Barry] has been idled for sometime. Although producers will be hopeful that it will impact on prices, it [the closure] will only reduce spare capacity in the UK. Europe, overall, is still oversupplied and there will be no shortages this year.”

The news has come just weeks after INEOS Capital announced that it would create Kerling Group from its INEOS Norway PVC assets and the INEOS ChlorVinyls business.

For more on INEOS’ Barry plant, visit ICIS plants and projects
For more on PVC, visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Stephanie Wilson
+44 20 8652 3214

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