The Chemical Industry Expects Plant Closures to Remain Constant for U.S. and Canadian Markets during Remainder of the Year

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Researched by Industrial Info Resources (Sugar Land, Texas). As the third quarter of 2007 comes to an end, a steady number of plants, an average of 10 plants per quarter, in the Chemical Processing Industry (CPI) have permanently ceased manufacturing and closed their doors. Based on plant research as part of Industrial Info’s North American Plant Database this pace of plant closures is expected to be maintained through the end of the year. At least seven plants have already been identified with plans of closing during the fourth quarter of this year equaling the loss of another estimated 664 jobs in the CPI. As research continues there is little doubt additional plant closures will be identified before the years end.

For all the plants that have already closed this year, almost one-third employed 100 or more people and collectively they employed approximately 2,000 people. Adding to the impact of these closures is the type of business or products they produced. The majority of these closures have been plants producing specialty resins and chemicals used in the manufacture of plastic materials, synthetic resins and nonvulcanized elastomers. This group of producers is generally the crowd that leads spending for the CPI and these closures likely represent consolidation due to completed mergers and acquisitions over the past year.

Grifftex Chemicals, a subsidiary of WestPoint Stevens Incorporated (West Point, Georgia), owned the largest plant that closed this year. Located in Opelika, Alabama, this plant employed 340 people and produced textile chemicals. Canada has also made an impact in plant closures this year loosing approximately 200 jobs by the closure of a methanol and inorganic chemicals plant located in Edmonton, Alberta owned by Celanese Limited (Dallas, Texas). Celanese had been slowly downsizing and consolidating operations at this plant site for the past two years.

One plant that continues to escape permanent closure includes Alaska’s Kenai fertilizer plant owned by Agrium Incorporated (Fort Saskatchewan, Alberta). With just under 200 employees, Agrium has been faced with the very real potential of having to permanently close the plant for more than a year now. With the consistent rising cost of natural gas, the plant’s current feedstock, and its availability in the region, Agrium has had difficulty running at full capacity and planned to close the plant on several occasions over the last year. Current plans for the site include the potential for converting the plant’s fuel to coal and installing coal gasification technology to produce not only fertilizer products, but a host of very lucrative hydrocarbon fuels as well. Pending government approval and funding, construction for the $2.4 billion project could start as soon as late 2009.

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