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Axiall joint-venture ethane cracker begins construction, 4Q loss widens year-on-year

HOUSTON, February 25, 2016 (PCW) –- Axiall Corporation on Thursday said the construction of its joint-venture ethylene facility with Lotte Chemical is “well under way.”

The final investment decision to move ahead with the project was made in mid-December. Ethylene production capacity at the Lake Charles plant will be about 1 million mt/yr (2.2 billion lb/yr). Start-up is anticipated in early 2019.

The agreement with Lotte allows Axiall to commit additional capital to the plant up to three years prior to completion. This allows the company to “know actual construction cost and better understand the then-ethylene supply markets,” CEO Tim Mann said.

Additionally, Mann said plant turnarounds would largely occur in the second and third quarters of this year with 2H seeing the largest production impact, particularly for its chlor-alkali assets. Its vinyls sector will see a large VCM turnaround in 2Q, with a small PVC unit maintenance between the third and fourth quarters. Maintenance spending is set at around $320 million, about flat to the 2015 level.

On Thursday, Axiall also announced it had agreed to sell two of its non-core building products businesses, totaling about $40 million. The two businesses are its window and door profiles segment to OpenGate Capital and its Solucor compound additives business to Galata Chemicals. Both deals are expected to close by the end of this quarter.

The company is still looking to sell its core building products business and expects to close on that deal by the middle of the year.

Axiall also reported a fourth-quarter net loss of $56.8 million, compared to a loss of $13.8 million in 4Q 2014. The company attributed this to lower products prices and a stronger US dollar. – Samantha Hartke

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