LyondellBasell and Covestro Announce Shutdown of PO11 Unit at Maasvlakte
In a recent move aimed at enhancing profitability, LyondellBasell and Covestro, two leading global chemical producers, have announced their decision to shut down the PO11 unit at their shared production site located in Maasvlakte, Netherlands. This unit, which manufactures polyoxymethylene (POM), a type of engineering plastic, has been a significant contributor to the companies’ combined production capacity.
Background on LyondellBasell and Covestro
LyondellBasell (LYB) is a leading global manufacturer of polymers, chemical intermediates, and refined products. Covestro AG, a subsidiary of BASF SE, is one of the world’s largest polymer companies, focusing on the production of high-tech plastics and polyurethanes. Both companies have a long-standing partnership, with LyondellBasell owning a 50% stake in the PO11 unit, while Covestro holds the other 50%.
Reason Behind the Decision
The decision to shut down the PO11 unit comes as a result of continued pressure on profitability in the global chemical industry. The companies stated that the high operating costs and declining demand for POM in certain markets have made it increasingly difficult to maintain the unit’s profitability. The shutdown is expected to take place in the second quarter of 2023.
Impact on the Companies
The shutdown of the PO11 unit will result in significant restructuring costs for both LyondellBasell and Covestro. The companies have not yet disclosed the exact amount of these costs but have stated that they will take necessary measures to mitigate their impact. The decision is also expected to lead to job losses, although the exact number has not been announced.
Impact on Consumers
The closure of the PO11 unit may lead to increased prices for certain products made from POM, such as automotive components, pipes, and electrical appliances. However, it is important to note that alternative sources of POM exist, and other manufacturers may be able to meet the demand. The overall impact on consumers is expected to be minimal.
Impact on the World
On a larger scale, the shutdown of the PO11 unit could have implications for the global chemical industry and the European Union (EU) economy. The EU is a significant market for POM, and the closure of the Maasvlakte unit could lead to a decrease in domestic production, potentially increasing the region’s reliance on imports. However, it is essential to remember that the chemical industry is a global market, and other producers outside the EU may be able to fill the gap left by the Maasvlakte unit.
Conclusion
The decision by LyondellBasell and Covestro to shut down the PO11 unit at Maasvlakte is a significant development in the global chemical industry. While the immediate impact on consumers is expected to be minimal, the long-term consequences for the companies, the EU economy, and the industry as a whole remain to be seen. As the chemical industry continues to face pressure on profitability, we can expect to see more restructuring and consolidation in the coming years.
- LyondellBasell and Covestro to shut down PO11 unit at Maasvlakte due to profitability concerns
- Unit manufactures polyoxymethylene (POM) and contributes significantly to the companies’ production capacity
- High operating costs and declining demand for POM in certain markets led to the decision
- Restructuring costs and job losses expected
- Impact on consumers minimal due to alternative sources of POM
- Potential implications for the EU economy and the global chemical industry
