PE MAKER JUGGLES PRODUCTION

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Polyethylene giant Millennium Petrochemicals will eliminate 240 million pounds of annual high density polyethylene capacity at its La Porte, Texas, facility by the end of next year.

Half of that total will be shut down this year at the 35-year-old plant, company officials said.

The shutdown will be accompanied by a debottlenecking effort that will add a combined 115 million pounds of annual low density PE production at La Porte; Clinton, Iowa; and Port Arthur, Texas, between 1999 and 2001.

The debottlenecking also will add 35 million pounds of annual HDPE gas-phase capacity at Port Arthur and 50 million pounds of annual linear LDPE capacity at Morris, Ill., in that same time frame.

The announced shutdown ``is consistent with Millennium's continuing plans to close down its less-efficient, less-economical units to keep its reactor portfolio modern and competitive,'' Ronald Yocum, president and chief executive officer, said in a prepared statement.

The shutdown also follows a recent company trend of closing production units while adding capacity through debottlenecking. The firm eliminated 110 million pounds of annual HDPE production at La Porte last year, while in 1993, 60 million pounds of annual LDPE capacity were taken from the same site. 1993 also saw the elimination of 15 million pounds of annual LDPE capacity from the company's Tuscola, Ill., facility.

PE prices have been on the rise this year, and the shutdown ``is not a knee-jerk reaction to current pricing,'' according to Mickey Foster, vice president of investor relations for parent company Millennium Chemicals. Foster said the closing is part of a five-year plan that runs through 2001.

``This move relates to the constant pruning of our portfolio,'' Foster said.

Since 1996, Millennium has added 480 million pounds in new annual gas-phase LLDPE capacity at La Porte. The company also gained 300 million pounds of annual HDPE capacity at Port Arthur by converting an existing LLDPE reactor.

After the shutdowns and debottlenecks take effect, Millennium's annual PE capacities will be 1.67 billion pounds for LDPE, 1.18 billion pounds for LLDPE and 1.73 billion pounds for HDPE.

According to company officials, those totals place Cincinnati-based Millennium first in U.S. LDPE production, fourth in LLDPE and third in HDPE.