Georgia Gulf Corp. plans to add 450 million pounds of PVC capacity in Plaquemine, La. If the project is approved, Georgia Gulf will become the third North American PVC maker with an expansion project in the works.
The Atlanta firm filed a document Jan. 24 with the Securities and Exchange Commission confirming the plan, which would cost $100 million and would be completed in early 2008. Before breaking ground, Georgia Gulf needs to have its air permit at the site modified by the Louisiana Department of Environmental Quality.
In the SEC filing, Georgia Gulf said it hopes to receive LDEQ approval in the second quarter. LDEQ officials said Jan. 26 that the request had been approved for a 30-day public notice period. Since the permit change is considered a ``minor modification,'' it does not require approval from the federal Environmental Protection Agency, LDEQ officials said.
The project would increase the firm's annual PVC capacity in Plaquemine to almost 1.7 billion pounds and its overall annual PVC capacity to almost 3.2 billion pounds. Georgia Gulf also makes PVC at plants in Aberdeen, Miss., and Oklahoma City.
``We're looking at this as a modernization project,'' Georgia Gulf spokeswoman Angie Tickle said. ``We want to improve the productivity of the plant.''
Tickle added that Georgia Gulf ``is projecting good growth rates [for PVC] for the next few years,'' but she declined to offer specifics.
And while Georgia Gulf - like other resin makers - has had to contend with high prices for natural gas feedstock, that climate did not deter the planned expansion.
Natural gas prices ``have got to a level no one had dreamed of,'' Tickle said. ``But for the most part we've been able to pass the cost through.''
Other PVC suppliers with expansions under way are:
* Shintech Inc. of Houston, which plans to add 1.3 billion pounds of PVC capacity - and 4 billion pounds of capacity for related feedstocks - in Iberville, La., by the end of the year.
* Formosa Plastics Corp. USA, which plans to add 375 million pounds of capacity by mid-2007 in Point Comfort, Texas.
Fueled by a strong construction market - which accounts for 60-70 percent of domestic PVC use - PVC consumption in the United States and Canada climbed 9 percent between 2001 and 2004, according to the American Plastics Council in Arlington, Va. Sales in 2004 almost hit 16 billion pounds and were almost on track to match that total in 2005.
In the first nine months of 2005, Georgia Gulf's sales of chlorovinyls - including PVC - were up 8 percent to almost $1.2 billion, compared to the year-ago period. Profit in that segment also was up 13 percent to $148 million. Chlorovinyls accounted for two-thirds of Georgia Gulf's total sales in that period.
On Wall Street, Georgia Gulf's per-share stock price peaked around $55 in early March but has tumbled since then. It was changing hands for around $32 in late trading Jan. 26.
