New Chlor-Alkali Capacity Nears Startup, Additional Capacity Gets Closer Scrutiny

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Chemical Processing Industry (CPI) of North America is showing some vulnerability to the global economic slowdown with a number of closures, staff reductions and budget cuts. There are several segments of the CPI such as ethylene, sulfuric acid, chlor-alkali products and several others that are core to the growth of downstream segments in the industry. Producers of these chemical commodities have each made drastic cuts in production or taken capacity completely offline in recent months in response to slow demand, as well as efforts by downstream producers to reduce inventories.

Olin Corporation (NYSE:OLN) (Clayton, Missouri) is nearing completion of a major chlor-alkali plant expansion of the Saint Gabriel, Louisiana, plant, which cost an estimated $146 million to construct. This expansion eliminates the use of old mercury cell-technology, while increasing production efficiencies at the site. Construction is expected to begin this summer for the dismantlement and demolition of the former chlor-alkali unit.

The Dow Chemical Company (NYSE:DOW) (Midland, Michigan) has placed plans for a new chlor-alkali unit addition at the Freeport, Texas, plant complex on hold in recent months. This new unit carries a price tag estimated at nearly $300 million and originally carried a fairly aggressive timetable in which construction was originally expected to begin early this year.

Westlake Chemical Company (NYSE:WLK) (Houston, Texas) has plans for a similar size chlor-alkali project planned for its Geismar, Louisiana, plant site. The Geismar site is the former Borden Chemicals & Plastic site that now belongs to Westlake and operates under the name Geismar Vinyls Company LP. Westlake, with the help of engineering contractor CDI Engineering (Houston), has completed a significant amount of the upfront engineering for this project, which will produce chlorine, caustic soda, hydrogen and muriatic acid when complete. Once construction starts, it will take nearly two years to get capacity online. No definitive start date is known, although this project could be in the field by late this summer.

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