HOUSTON (Dec. 7, 12:30 p.m. ET) — North America's ongoing natural gas boom is prompting Westlake Chemical Corp. to spend $40 million on improvements to its ethylene feedstock operations in Calvert City, Ky.
Houston-based Westlake plans to perform a major modification of ethylene furnaces that will ultimately reduce costs, improve operating efficiency and consume less energy, company officials said in a Dec. 5 news release. The project will not increase Westlake's annual ethylene capacity there, spokesman Dave Hansen said in a Dec. 8 e-mail.
Westlake uses all of the ethylene produced in CalvertCity to make numerous products there, including PVC resin, PVC pipe, EDC and VCM feedstocks and caustic soda. Westlake's North American Pipe unit in CalvertCity makes large diameter pipe used in sewer, water and related applications. The 21-year-old plant employs 380.
“Our Calvert operations are an important part of our overall business strategy,” President and CEO Albert Chao said in the release. “We remain committed to building a strong and successful future at the site.”
Kentucky Gov. Steve Beshear added in the release that “the vote of confidence that Westlake has given to the quality of Kentucky's work force and business climate is heard loud and clear with this $40 million investment.”
Earlier this year, Westlake announced plans to increase capacity for ethane-based ethylene - derived from natural gas - at its plant in Lake Charles, La. Improvements at CalvertCity were being considered at that time. Officials said then that new technical developments in the natural gas industry were making expansion in North America attractive.
In the first nine months of 2011, Westlake's sales improved 16 percent to almost $2.8 billion vs. the year-ago period. Nine-month profit soared 69 percent to almost $233 million in the same comparison. In addition to its PVC-related products, the firm is a leading producer of low density polyethylene in North America.
On Wall Street, Westlake
's per-share stock price began the year around $44 and peaked above $65 in late April, but was near $40 in early trading Dec. 9.