07 November 2012 14:14 [Source: ICIS news]
LONDON (ICIS)--LSB Industries will replace the under-performing ammonia converter at its primary plant in Pryor, Oklahoma, in early 2013 rather than late 2012, the company said late on Tuesday.
The facility is now operating at around 80% of capacity having suffered unspecified technical problems that reduced third quarter output by 50% and cost the producer $14m (€10.9m) in lost operating income.
LSB chairman and CEO Jack Golsen said: "Continued problems with the ammonia converter at Pryor's main ammonia plant have prevented us from reaching optimum production rates. However, the Pryor facility's ammonia production has [now] stabilised at approximately 80% of our targeted production rate of 600 tons per day.
"Additionally, market prices for ammonia have increased. If these trends continue through year-end, the increase in production and pricing should offset most of Pryor's lost margin experienced during the third quarter.
"Our plan at Pryor includes replacing the ammonia converter and making other modifications in early 2013 that should allow us to achieve our targeted rates."
Turning to the company's El Dorado plant in Arkansas, which was badly damaged in May when a reactor in its 98% concentration nitric acid plant exploded, Golsen said the accident had reduced its quarterly operating profit by "at least $9m".
"We expect this situation to continue, but to a lesser degree when the sulfuric acid plant is brought back into production during the fourth quarter," the senior executive added.
"Our insurance policy provides business interruption coverage, which we believe will cover most of these lost profits and extra expenses."
The manufacturer and marketer of climate-control products and chemicals for the agricultural, mining and industrial markets posted a slight rise in third quarter net income to $6.7m from $6.3m in the year-ago period as sales grew 3.2% year-on-year to $182.4m.
($1 = €0.78)
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