Materials firm Trinseo is taking steps to improve its finances, including closing a styrene monomer plant in Germany and an acrylic sheet plant in Mexico.
In a news release, officials with Trinseo in Wayne, Pa., said that the firm's styrene plant in Böhlen, Germany, will be closed because of "an uncompetitive position in the global styrene market due to the site's subscale size, industry capacity additions and elevated natural gas prices in Europe."
Earlier this year, officials said that the Böhlen plant — which has annual production capacity of almost 700 million pounds — posted a loss of about $30 million for the four quarters ending in the second quarter of 2022.
Trinseo's acrylic sheet plant in Matamoros, Mexico, will also close, with production moved to a continuous sheet plant operated by the firm's Aristech Surfaces unit in Florence, Ky.
In other cost-cutting moves, Trinseo is closing a polycarbonate resin line in Germany and reducing styrene butadiene latex production in Finland. The PC line in Stade is being closed because of "an uncompetitive position in the global [PC] market." The firm will continue to make PC in Stade for use in its downstream compounding business.
In Finland, Trinseo will reduce SB latex capacity in Hamina starting mid-year 2023 because of overcapacity of SB latex in Europe. These moves in total are expected to improve Trinseo's annual profit by about $60 million vs. its fourth quarter run rate. Most of this improvement will be seen in 2023.
Trinseo expects to incur between $79 million and $89 million of pre-tax, non-recurring charges related to the closing of manufacturing at these facilities. Of this, $55 million to $61 million is expected to be incurred in the fourth quarter of 2022.
Officials said that the actual timing and costs of these actions may differ from Trinseo's current expectations and estimates. These charges are subject to ongoing negotiations with works councils, industrial associations and government authorities.
Trinseo declined to confirm how many jobs would be impacted by the closings.
Trinseo also confirmed that it paid a fine of 32.6 million euros ($34.6 million) this month that had been issued by the European Commission in late November. The fine was a result of the commission's 2018 investigation of styrene purchasing practices in Europe.
In July, economic conditions caused Trinseo to delay the proposed sale of its styrenics business, which has annual sales of $1.1 billion. The firm already had made several major moves since late 2020.
In December 2020, Trinseo bought the acrylic business of Arkema SA for almost $1.4 billion. That deal included the Plexiglas brand in the Americas. Then in 2021, Trinseo acquired acrylic sheet maker Aristech Surfaces LLC for $445 million.
Also in 2021, Trinseo acquired Dutch plastic waste collection and recycling company Heathland BV for an undisclosed price. The firm also made a major divestment in 2021 when it sold its synthetic rubber business to Poland's Synthos SA in a deal valued at $491 million.
Trinseo has had a challenging financial year in 2022. In the first nine months of the year, the firm posted a loss of almost $66 million, after showing a profit of $316 million for the same period in 2021. Even with the loss, Trinseo's nine-month sales were up 13 percent to almost $4 billion in the same comparison.
Nine-month sales in Trinseo's Base Plastics unit, including polycarbonate and ABS, were down 6 percent to $1.05 billion. The firm's polystyrene unit — not including its Americas Styrenics joint venture — saw sales growth of almost 3 percent to $877 million. Trinseo's Engineered Materials group, including acrylic resin and sheet, had sales increase 76 percent to $839 million, partly resulting from recent acquisitions.
On Wall Street, Trinseo's per-share stock price began the year just above $57, but was at $22.30 in early trading Dec. 20 for a decline of around 60 percent.
Trinseo employs about 3,400 worldwide and posted sales of $4.8 billion in 2021.