Future Chemical Plant Closures in the U.S. and Canada Remain Low

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Industrialinfo.com is currently tracking fifteen chemical plants, within the United States and Canada, where future plant closures are scheduled or pending. This small number of planned closures is a positive note for the Chemical Processing Industry (CPI), which continues an upward swing in its cyclical nature. The total number of job losses as a result of these closures is estimated just over 2,300 and most of these will be in the United States.

Several of the closures are part of major consolidation efforts, such as Huntsman Chemical Company (NYSE:HUN) (Salt Lake City, Utah), which is closing several sites across the country, with the goal of centralizing many of its research and development functions into a new facility under construction in Texas. See related Industry Alert titled - Huntsman Progresses with Construction of New R&D Complex in Texas

Other significant closures as a result of consolidation are planned by Dow Chemical Company (NYSE:DOW) (Midland, Michigan), which will close its Garland, Texas, and Tucker, Georgia, plant sites this year. Much of this capacity will be replaced by a major $100 million new unit addition under construction at the company's Taft, Louisiana, chemical complex.

Geographically, a majority of the future closures are located among two market regions, with six of the fifteen plants along the eastern coast and five in the southern market region.

Click on this image to view an index of the planned CPI plant closures that Industrialinfo.com is currently tracking.

The only plant closure planned for the remainder of the first quarter is Arizona Chemical Company’s dimer acid plant located in Picayune, Mississippi, which is planning to cease operations at the end of March. The first closings of the second quarter include BASF Corporation's polystyrene resin plant located in Jamesburg, New Jersey, in April, and an acetate fibers plant located in Rock Hill, South Carolina, owned by Celanese Acetate LLC.

"The total number of plant closures that actually take place in 2005 will increase slightly as the year progresses and announcements of additional closure plans are released, although the increase is expected to be minimal. The net effect on the CPI at the end of the year is expected to be substantially less than the nearly 69 plants we reported to have closed during 2004," commented Trey Hamblet, Chemicals Group Manager for Industrialinfo.com. In 2003, Industrialinfo.com reported over 100 CPI plant closures in the United States and Canada.

The current strengths that CPI plant owners are presently showing, in spite of the sustained high costs of energy, feedstock, and transportation, could set the pace for fewer plant closures than has been seen in many years, while also increasing the utilization rates and profitability of existing assets.

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