Smaller operations continue to be cut in the polystyrene market, as BASF Corp. has sped up planned closings of plants in Holyoke, Mass., and Santa Ana, Calif., and Bayer Corp. has announced the closing of its PS operation in Addyston, Ohio.
BASF's Holyoke plant, with 45 employees and capacity of 80 million pounds per year, closed in early November, a month ahead of schedule. The Santa Ana site, which employs 37 and produces 75 million pounds of PS, was set for a late 1998 close, but will now close its doors in late summer.
Both plants were victims of PS overcapacity and shrinking margins, as well as a move toward larger, ``world-class'' facilities, said David Vranesich, BASF's PS marketing and sales director.
``The company will gain by taking out capacity the market
doesn't need right now,'' Vranesich said in a Nov. 20 telephone interview from BASF headquarters in Mount Olive, N.J. ``The plants were too small to operate in today's marketplace. You need facilities with more than 200 million pounds of capacity.''
Bayer's closing of the Addyston works, its only North American PS site, was affected by Nova Polymers' recent decision not to renew its agreement to buy all of the plant's output. Bruce Kleinert, product manager for Bayer's Lustran ABS, said the PS operations will close by year-end. It will continue to produce 450 million pounds of ABS and styrene acrylonitrile at the site.
``We could switch [the PS operation] to ABS or SAN or it could be run on polystyrene again,'' Kleinert said from Bayer's Pittsburgh headquarters. ``You can't rule it out, but polystyrene doesn't seem to fit our strategy right now.''
Kleinert added if the plant returned to PS, it would probably try to find a single-buyer situation, such as it had with Nova.
PS prices have dropped an average of 4 cents since midsummer, a move that many in the industry attributed to BASF's new plant in Altamira, Mexico, as well as Chevron's expansion at Marietta, Ohio.
The BASF closings are more than offset by its opening of the 315 million-pound-per-year plant in Altamira and its plans to add 240 million pounds of PS in Joliet, Ill., next year. But Vranesich said actions such as the BASF closings, recent PS shutdowns announced by Huntsman Corp. of Salt Lake City and the Bayer/Nova situation in Addyston ``are starting to add up.''
``It clearly shows there's some action in the marketplace and BASF isn't the only company suffering,'' he said. ``Conditions now are just poor. We expect our closings to help us and we hope they'll help the entire market.''