Trinseo is once again looking at the potential closure of its loss-making styrene production plant in Böhlen, Germany. The company says it is currently consulting with the local works council.
The facility, which has a nameplate annual capacity of 300 kilotons, generated negative profitability of approximately $30 million over the last four quarters ending Q2 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 optimisation across its portfolio.
“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,” he continued. “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.”
The first time Trinseo initiated a consultation process was in March 2020. In the first-quarter 2020 results of that year, the company said it had taken a $38 million pre-tax charge for the impairment of “certain long-lived assets” at the Böhlen and Schkopau sites. However, later that year it said that the feedstock supply issues that threatened the operation of the 300,000-metric ton/year plant had been resolved and that it had secured a new agreement on raw materials supply.
Then, in November 2021, Trinseo announced that it was exploring options to sell its polystyrene and styrene business, including the Böhlen facility. It later dropped those plans due to the uncertain economic and geopolitical conditions in the market.
Now, with inflation rates and energy costs rising, shutting the loss-making facility down may simply be the best option still open.