Updated — CertainTeed Corp.'s PVC resin plant in Westlake, La., was the smallest plant of its kind in North America, according to an analyst.
As a result, CertainTeed may have found itself at a disadvantage in accessing low-cost vinyl monomer as other resin producers plan PVC capacity expansions, according to Phillip Karig, a managing director at Mathelin Bay Associates LLC, a St. Louis, Mo.-based consulting firm, which offers procurement and technical assistance to plastic processors.
CertainTeed shuttered its PVC resin manufacturing plant in Westlake after 40 years of operation in response to steep competition in the market.
The facility produced a proprietary PVC resin called Certavin that was used internally for CertainTeed's vinyl siding, fence and railing products until it closed Jan. 2.
The polymer plant's 50-plus employees remain on active status through March 2. They will receive severance packages and have chances to move to other company positions as part of the out-placement support.
Last August, CertainTeed was fined $365,500 to settle alleged violations of the Safe Drinking Water Act at the facility. A new drinking water well was installed as part of the compliance plan.
The facility was a part of CertainTeed's siding products group, which has found other material sources along with the company's extrusion sites for fence and decking.
“This will have no impact on those products or customers, as we have identified other PVC resin suppliers who will service these plants going forward,” CertainTeed spokeswoman Lisa Miree-Luke told Plastics News in an email.
Based in Malvern, Pa., CertainTeed is the fifth largest pipe, profile and tubing manufacturer in North America with estimated sales of $680 million, according to Plastics News' latest ranking.
CertainTeed is a subsidiary of Cie de Saint-Gobain SA, which is headquartered in France and posted global group sales of $3.7 billion in 2017.
Founded in 1904 to produce fire-resistant roof shingles, CertainTeed grew into a building products manufacturer. The company began offering PVC products in 1965 when it acquired pipe extruder Plains Plastics. It expanded into selling vinyl siding to builders and contractors in 1969. The Westlake polymer plant made CertainTeed a vertically integrated manufacturer with control of its entire process from raw materials to production to marketing.
In 2013, CertainTeed sold its PVC pipe business to Westlake Chemical Corp. for $175 million amidst plans to focus more on housing products.
CertainTeed touted its resin plant as the only PVC manufacturing facility to use the bulk polymerization process, which it patented and described as using significantly less energy and water when compared to suspension processes used by other resin producers.
However, looking ahead, company officials questioned the need for the facility to continue making PVC with so many other suppliers out there.
“Long-term raw material supply options were no longer economically viable to allow Lake Charles to continue to supply resin to our plants,” Miree-Luke told The American Press.
CertainTeed was the smallest PVC pellet maker in North America and may have found itself at a disadvantage in accessing low-cost vinyl monomer as other resin producers plan PVC capacity expansions, according to Phillip Karig, a managing director at Mathelin Bay Associates LLC, a St. Louis, Mo.-based consulting firm, which offers procurement and technical assistance to plastic processors.
While the majority of PVC demand comes from building and construction application, such as siding, windows and drain and waste pipe, CertainTeed didn't have much more than 2 percent of North American PVC capacity, Karig said in an email.
“With several new PVC capacity expansions scheduled to come on-line for the next few years, a higher-cost producer such as CertainTeed was sure to face margin pressures,” Karig said.
Time may tell which material manufacturers pick up orders from CertainTeed.
“Westlake is expected to bring new PVC capacity on-line sometime in 2019, but any of the several other producers scheduled to start-up new PVC capacity in the next several years might make enough room to strike a long-term deal to provide all or a large portion of CertainTeed's PVC requirements,” Karig said.
CertainTeed also recently closed a manufacturing plant for fiberglass and foam insulation in Sherman, Texas. About 35 employees worked in production and warehousing operations. All were laid off in early December but the eight warehouse workers.
The plants closures aren't related. Miree-Luke said the Sherman site closed “to align production capabilities of that business with the changing needs of that market and our insulation customers.”