Slumping demand for expandable polystyrene has led BASF Corp. to shut down 50 million pounds of capacity in South Brunswick, N.J.
``The last two years have been extremely challenging for the EPS industry in North America, as block and shape resin demand has significantly declined,'' BASF EPS business director Kevin McQuade said in a March 25 news release. ``Our action is intended to bring production capacity ... in balance with market demand.''
BASF's 100 employees in South Brunswick will be unaffected by the move, company spokesman David Elliott said.
U.S. and Canadian EPS sales dropped 5 percent in 2001, with production slipping 7 percent, according to the American Plastics Council in Arlington, Va. Industry sources reported that prices plunged an average of 10-15 percent as well.
McQuade added that the EPS market has been affected by the U.S. economic slowdown, destocking of processor inventories and continuing migration of packaging business to Mexico.
EPS sales and captive use accounted for about 16 percent of the overall U.S./Canadian PS market last year.
After the closing, BASF will operate 200 million pounds of EPS capacity in South Brunswick. The firm also produces an unspecified amount of EPS through a joint venture in Altam¡ra, Mexico.
Post-cutback, BASF will remain North America's third-largest EPS maker with a 12 percent share of the market, trailing Nova Chemicals Corp. of Pittsburgh and Dart Container Corp. of Mason, Mich.