Shintech officials tried to make the best of an uncomfortable situation in Louisiana last week, as they discussed the reasoning behind the firm's decision to relocate a proposed PVC manufacturing complex.
The Vinyl Institute, meanwhile, called the company a ``victim of a ruthless campaign of untruths'' and denounced those whose vocal protests played a role in Shintech's decision.
Shintech said recently it may build a scaled-down, $250 million PVC resin plant in Plaquemine, La., instead of the $700 million facility that will produce PVC, vinyl chloride monomer, caustic soda and chlorine in Convent, La., 25 miles east of Plaquemine. The new plant would produce 1.3 billion pounds of PVC annually, keeping Shintech in the top spot in North American production. Shintech proposed the move after more than a year of controversy and protest from local environmental groups that claimed the company's presence in Convent would be unfair to the area's minority-heavy population.
The Environmental Protection Agency had become involved in the case, investigating claims of environmental racism and reviewing air permits previously issued to Shintech by state officials. Those investigations have been placed on hold while Shintech finalizes the move to Plaquemine.
Shintech controller Dick Mason said in a Sept. 23 telephone interview that it is ``inevitable'' that environmentalists will consider the proposed move a victory. However, he noted, many other factors influenced the company's decision.
``There's not a single driving force behind this,'' Mason said. ``We just feel that [moving to Plaquemine] will allow us the opportunity to do what we do best, which is manufacturing and selling PVC resin.''
Mason also admitted the decision ``has some impact on [Shintech's] long-term strategy.''
``For the time being and for the considerable future, we're not going to back-integrate [into VCM],'' he said.
If Shintech builds in Plaque-mine, it would be on land near Dow Chemical Co.'s chlorine/ VCM facility. The proximity would allow Shintech to obtain VCM by pipeline, instead of by barge or rail as it would have done in Convent.
``From an environmental and business standpoint, [barge and rail transport] are much-less-desirable solutions,'' Mason said.
He added that the most attractive of several properties Shintech has looked at in Plaquemine is owned by Dow, but is not within Dow's actual chemical complex there. He expects negotiations between Shintech and Dow to begin in two to three months.
``[Dow] is one of our biggest [VCM] suppliers and I'm sure we're one of their largest customers,'' Mason said.
Shintech also may be able to avoid further charges of environmental racism by relocating. Plaquemine's minority concentration is not as heavy as Convent's, according to Mason, who added that Plaquemine's employment rate and per-capita income are higher than those in Convent.
The EPA said in a news release it supports Shintech's ``constructive approach for ensuring industrial growth while protecting the rights of communities.''
But Greenpeace labeled the move ``an obvious face-saving move by a player in a dirty industry.'' Greenpeace officials also said the group plans to oppose Shintech if the Plaquemine site is approved.
Vinyl Institute Executive Director Robert Burnett issued a statement in which he said: ``We certainly understand Shintech's decision. The company is a victim of a ruthless campaign of un-truths by people whose only concern is pushing their anti-business agenda.''
He went on to say that the move will be positive for Plaquemine, but is ``a sad result for the people of Convent, who were anxious for the jobs Shintech would bring and the taxes that a clean, state-of-the-art plant would produce for the community.''
The most important result of the move, Burnett said by telephone from VI's Morristown, N.J., headquarters, is that Shintech will be able to provide the PVC market with the volume of material it will need in the next three to five years.
A spokesman for Occidental Chemical Corp., the Dallas-based market leader, said he does not think Shintech's decision will have much of an impact on the overall PVC market, since the new plant should still come on-line in 2000 or 2001 when profitability is expected to be better than current levels.
``It shouldn't have a significant impact on operating rates to the point where profitability is affected,'' he said.
Shintech already has established contact with residents in Plaquemine. Last week, the company hosted a meeting attended by about 75 area residents at Dow's Plaquemine facility. Shintech officials have said the company will assess local concerns before submitting an application for an EPA permit to build in Plaquemine.
``We've got a lot to do in our community outreach program,'' Mason said. ``But we're going to be just as aggressive in getting feedback in Plaquemine as we were in Convent.''
Mason added that declining industry profitability seen in the past year didn't play a role in Shintech's decision to relocate.
``We don't look at PVC as a cyclical business,'' he said. ``But if we did it would be inappropriate or foolish to make a long-term decision [based] on where you are at any given point in the cycle.''