An attempt to reopen another part of the former Flint Hills Resources LLC resin plant in Odessa, Texas, has fallen through.
Part of the plant which closed in late 2008 reopened in October as Rextac LLC making amorphous polyalphaolefin resins, a specialty polypropylene. FHR Odessa Acquisition Inc. an entity established by former plant workers and organized by investment firm Constellation Capital Management LLC had hoped to purchase and reopen other parts of the plant to make specialty polyolefins, but was unable to reach a deal with Flint Hills.
Following FHR's evaluation, FHR has determined that it will not enter into a sales agreement with Constellation or the employee association, Flint Hills executive Glenn Personey wrote in a Feb. 15 letter to Odessa Mayor Larry Melton.
Faced with the ongoing chemical industry downturn, we believe there are no credible opportunities that would allow this plant to be sold and restarted, added Personey, managing director of business development for Wichita, Kan.-based Flint Hills.
This view has not been formed lightly or without careful consideration of the considerable information we have gleaned from and about Constellation.
Bill Gilliam, a former executive with Rexene Corp., one of the plant's previous owners, was involved in the proposed deal as a senior adviser with Constellation. Officials with the firm, which is based in Novato, Calif., could not be reached for comment.
Several options to restart the plant were explored in recent weeks, including one under which the city would briefly assume ownership of the site before selling it to investors. City officials rejected that proposal out of concern over possible liabilities, according to a recent article in the Odessa American newspaper.
Moving ahead, Flint Hills now will look to demolish the plant or sell it to someone who will do the same, Personey said in the letter.
Any demolition would not affect Rextac, which employs 80 at the site, said business director Blake Batte, adding, We're building sales every month, he said.
Rextac is owned by investors and Odessa toll processor Orion Pacific Inc., which had worked with the plant's prior owners for 25 years. At its peak, the Odessa site employed almost 400 and operated more than 1 billion pounds of combined annual capacity for PP and polyethylene.
Copyright 2010 Crain Communications Inc. All Rights Reserved.