The US-based specialty materials company said the plant, which has a nameplate capacity of 300,000 t/y, has lost about $30 million during the four quarters ending June 2022.
President and CEO Frank Bozich said that given the current economic outlook of higher inflation, lower customer demand and elevated energy costs, the company is evaluating asset optimization across its portfolio.
He commented: “The cost position of the Böhlen facility is challenged due to the current energy cost environment in Europe as well as the facility’s smaller scale, and it’s difficult to envision significant earnings improvement at the site in the near to medium term. Therefore, we have decided to evaluate the potential closure of this plant. In addition to improved profitability for Trinseo, we believe a closure will aid in achieving our 2030 sustainability goals, as Böhlen is one of our most carbon intensive plants.”
Trinseo first initiated a consultation process in March 2020. In its first-quarter 2020 results, the company said it had taken a $38 million pre-tax charge for the impairment of “certain long-lived assets” at the Bohlen and Schkopau sites, but later that year said that it had secured a new agreement on raw materials supply that would make the Böhlen styrene plant economically feasible.
Bozich said at the time that the company had begun exploring the divestment of its styrenics business and expected to launch a formal sales process in the first quarter of 2022. However, citing the macroeconomic and geopolitical uncertainty that has dominated markets this year, the company suspended its plans this past July, saying it would reevaluate when economic and financing conditions improve.
A potential sale is expected to include both the feedstocks and polystyrene reporting segments, as well as Trinseo’s 50% share of Americas Styrenics. Trinseo’s other business segments are latex binders, engineered materials and base plastics.
Both of the plants in question are located in eastern Germany and were part of the asset package Trinseo predecessor Dow Chemical acquired from the Treuhandanstalt, the agency charged with wrapping up state-owned business of the former German Democratic Republic.
Author: Elaine Burridge, Freelance Journalist
