Materials giant LyondellBasell Industries has made a $1.3 million donation to COVID-19 response efforts, but the global firm also has idled production at some compounding plants and is expecting lower first-quarter financial results.
The donation will support response efforts of the Global FoodBanking Network and United States local food banks, officials with LBI in Houston and Rotterdam, Netherlands, said in an April 14 news release. LBI's donation will support food banks in 17 countries and communities where the company has major operations.
"Even in the best of times, hunger and food insecurity is a challenge," CEO Bob Patel said in the release. "The COVID-19 pandemic has made this need even more severe, as food banks around the world have experienced an increase in demand and a decline in food donations.
"We wanted to help those who are finding it difficult to put food on the table by supporting these vitally important organizations," he added.
Global FoodBanking Network President and CEO Lisa Moon said that LBI's donation "will help ease the strain food banks are currently feeling and help us reach more people facing hunger during this difficult time."
LBI also recently donated isopropyl alcohol to Huntsman Corp. for production of 5 tons of hand sanitizer to help protect health care workers treating COVID-19 patients. Materials made by LBI, including polyethylene and polypropylene, are found in many applications used for protecting health and safety, such as medical devices, protective equipment, cleaning products and pharmaceuticals.
On the financial front, LBI officials said in an April 15 release that lower demand for some products has led the firm to temporarily idle production at several small plants in its Advanced Polymer Solutions unit that serve automotive end markets and to reduce production rates at other plants.
LBI's APS units include PP compounding sites as well as more than 50 compounding and concentrate production sites acquired from A. Schulman Inc. in 2018.
A company spokesman said in an email to Plastics News that the production changes were made at plants in Asia, Europe and North and South America, but he added that the company wasn't providing specific operational details.
In the April 15 release, LBI officials also projected that overall profit for the first quarter will be between $110 million and $180 million. A $180 million profit would represent a drop of about 78 percent vs. the same quarter in 2019.
Earning before interest, taxes, depreciation and amortization for the quarter is projected to be between $610 million and $680 million. An EBITDA level of $680 million would be down about 52 percent vs. the year-ago quarter.
"Events surrounding the ongoing coronavirus pandemic and the significant drop in the price of oil continue to evolve and impact global markets for LyondellBasell's products," officials said in the release. "Currently, all of our major global manufacturing sites are operational and demand for products used in packaging and medical applications remains robust."
LBI's manufacturing operations have been designated as an essential industry to support society's needs during the pandemic in most regions where LBI operates.
To reduce operational and financial risk, LBI is postponing some growth projects and planned maintenance, including slowing construction at a chemicals plant in Houston. Officials said that the firm also expects that aggressive inventory management and reduced pricing for raw materials and products will provide "a meaningful influx of cash" from working capital.
LBI will issue its full first-quarter financial report on May 1. The firm posted full-year sales of $34.7 billion in 2019.
Like many public firms, LBI's per-share stock price has been battered by the effects of COVID-19. The price began the year near $94.50 but was at $52 in late trading April 15 for a decline of almost 45 percent.