Chemical Processing
Chlor-Alkali Producers Continue to Plan for New Capacity with Investments Exceeding $800 Million
Westlake Group (Houston, Texas) made the most significant addition to future spending identified in recent months its the plans to add a new ...
Released Tuesday, September 11, 2007
Researched by Industrial Info Resources (Sugar Land, Texas)--Since June 2007, more than $350 million in total investments for new capacity in the chlor-alkali segment of the chemical processing industry (CPI) have been identified for the United States and Canada. These investments added to the more than $500 million that had been previously identified by Industrial Info as part of its North American Project Database. The increase is in response to improved demand from producers of ethylene dichloride, polyvinyl chloride and other related industry sectors, including an improving export market as feedstock and energy costs remain relatively stable.
Westlake Group (Houston, Texas) made the most significant addition to future spending identified in recent months its the plans to add a new chlor-alkali unit at its Geismar, Louisiana, plant. The unit would produce about 700 million pounds per year of chlorine, 790 million pounds per year of caustic soda, hydrogen and muratic acid. CDI Engineering (Baton Rouge, Louisiana) was selected to assist with project scope definition, and a decision on the project is expected soon. This isnt the only substantial investment in new capacity. Erco Worldwide (Toronto, Ontario) plans to expand its Port Edwards plant in Nekoosa, Wisconsin, through the conversion of mercury cell technology to newer membrane cell technology, increasing production and reducing emissions. These two projects make up more than half of the $800 million in capital and maintenance projects planned for this industry segment over the next 18 months.
There are approximately 45 individual plants operating in this segment of the CPI, and active projects have been identified as either underway or planned in at least 35 of these locations. These projects and plant locations are spread across 13 states and range from small $1 million planned plant maintenance turnarounds to the average $28 million project. The largest number of these projects are planned to begin construction during the fall of this year and then peak again in the early summer months of 2008.
This segment of the CPI has experienced several obstacles and challenges in recent years, including depressed demand, decreased exports and environmental compliance projects that drain on expansion dollars. The increased level of spending supports a positive outlook for not only these producers but also the industry. According to Industrial Infos research, the CPI is moving forward with a Confidence Factor of greater than 70%. The Confidence Factor measures the number of active and completed projects against canceled project activity over a five-year span to determine the level of confidence in future projects maturing and moving forward.
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View Project Report - 19001564 02006222
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