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Materials maker Styrolution will close its polystyrene plant in Indian Orchard, Mass., by the end of the year, moving some of that site's production to Decatur, Ala.
Closing the Indian Orchard plant will eliminate 58 jobs. The plant has annual production capacity of 330 million pounds and was opened by Monsanto Inc. in the 1970s.
Frankurt, Germany-based Styrolution now will convert a PS line in Decatur over to production of NAS-brand styrene methyl methacrylate (SMMA) resin by the end of the year. The firm also is in the process of adding SMMA production at its plant in Ludwigshafen, Germany.
In a Feb. 25 news release, officials said that PS "remains a core business for the company," but they added that the closing of Indian Orchard "comes following years of overcapacity in the North American PS market." North American PS demand actually grew about 1 percent in 2013, according to the American Chemistry Council in Washington, but that was only the third time in the last decade that sales posted year-over-year growth.
"Polystyrene in all regions, but especially in North America, has shrunk," Styrolution Americas president Alexander Glueck said in a phone interview. "Sales were good last year, but the outlook is flat. Our four plants were at a utilization rate that wasn't sustainable long-term."
In addition to Decatur and Indian Orchard, Styrolution also operates North American PS plants in Channahon, Ill., and Altamira, Mexico. Glueck said those plants had a combined utilization rate that was "in the low 70s" during 2013.
He added that PS has faced several challenges in the last decade. Some applications in packaging – one of the material's major markets – need less material now, according to Glueck, and PS also has seen intermaterial competition from polyethylene and PET, as well as from non-plastic materials. High benzene feedstock costs also have made PS expensive when compared to other resins, he added.
Growth for NAS, however, checked in at 5 percent last year, Glueck said, with much of that growth coming from specialty packaging and containers. Moving production of that material to Decatur and adding it in Ludwigshafen is part of Styrolution's plan to have production of both specialty and standard products in at least two regions in order to better serve local customers. Prior to the move, Indian Orchard had been the firm's only global NAS production site.
The Indian Orchard plant is one of Styrolution's older facilities and had the smallest production capacity of the firm's four PS sites. It also "doesn't have state-of-the-art layout or logistics," Glueck said. "From an economic point of view, (closing Indian Orchard) is the right decision. It's important to see (the closing and adding NAS production elsewhere) in the context of our Triple Shift strategy."
Styrolution's Triple Shift growth strategy is aimed to move the firm more into styrenic specialties, emerging markets and higher-growth industries, including automotive, construction, healthcare, household goods and electronics.
Other growth initiatives currently underway by Styrolution include:
- Building a production line making a specialty styrenic feedstock at its plant in Altamira. The new line will make alpha methyl styrene acrylonitrile (AMSAN), a material used in Styrolution's Novodur-brand ABS and Luran-brand ASA resins. Adding AMSAN production in Altamira will allow Styrolution to expand its product offering and increase supply reliability throughout the Americas, as well as in industries such as automotive and construction. Currently, Styrolution imports the material into the Americas from a plant in Germany. The new line in Altamira is expected to be in production by mid-2014.
- Forming a joint venture with Brazilian petrochemicals giant Braskem SA to build a new plant making ABS and related resins in Brazil. The plant would have annual capacity of about 220 million pounds for ABS, styrene acrylonitrile (SAN) and specialty styrenics. Styrolution would own 70 percent of the proposed JV. Groundbreaking for the proposed plant could begin as early as 2015, with production launching in 2017.
- Upgrading and consolidating its North American research labs into a single site in Channahon by mid-2014. The move will allow Styrolution to develop its own material grades in the region and will bring its R&D teams together to increase efficiency.
- Commercializing two new grades of its Zylar-brand styrenic copolymer that were introduced at the K 2013 trade show. The new grades are aimed at medical devices and household goods. A new grade of Novodur-brand ABS designed for electroplated applications also was launched at the show.
- Reorganizing some of its facilities in Germany in order to optimize production.
The changes affect styrenic specialty resins made at its sites in Cologne, Ludwigshafen and Schwarzheide. Styrolution will now offer Novodur ABS copolymer grades from all three sites, while Luran S materials (ASA and ASA/PC) are now available from both Ludwigshafen and Schwarzheide. The company also will expand compounding capacity in Schwarzheide to enable insourcing of specialty ABS and Novodur GF previously produced by external partners.
Styrolution was formed in 2011 as a joint venture between the styrenics units of Ineos Group and BASF SE. The firm employs 3,200 at 17 sites worldwide and has annual sales of almost $8 billion. It ranks as one of the world's largest makers of styrenics, including polystyrene and styrene monomer.