Epoxy
October 25, 2023
Invista to Close HMDA Plant in Texas
INVISTA decision to close Orange facility catches many by surprise Published 3:09 pm Thursday, October 5, 2023 By Staff Reports (invista.com) INVISTA’s announcement that it is shutting down production at its Orange facility was unexpected news to many.
Orange County Judge John Gothia said he was informed of the news Thursday. “Anytime we have a shut down or loss of jobs in the community, it’s never a good day,” Gothia said.
Gothia said the county has a number of programs to entice businesses to the area and stay competitive, but there’s not a lot to offer to keep an existing business. Looking toward the positive, Gothia noted there are a lot of growth and job opportunities on the horizon in Orange County coming in the next year, in addition to Lamar State College Orange offering a number of training programs to aid job seekers.
INVISTA operates its facility at 3055 FM 1006 in Orange. Francis Murphy, INVISTA president and CEO, said they appreciate the diligent and innovative work of employees at the Orange site over the years. “Unfortunately, lower than anticipated growth and an increase in global supply led to this difficult decision,” a company statement read. The site will begin the safe shutdown of the adiponitrile production unit right away and expects to cease production of hexamethylene diamine in mid-2024, according to information from INVISTA.
HMDA is the precursor for HDI.
Approximately 240 of the site’s 300 roles will be eliminated by the end of 2024. All impacted employees will be eligible for severance benefits. Throughout this transition, the company is committed to treating every employee with dignity and respect, leaders said. INVISTA’s top priority now and always is the safety of employees, contractors and the surrounding community.
“Ultimately, this decision was made to position our business to more competitively serve the long-term needs of our customers,” Murphy said.
Read more at: https://www.orangeleader.com/2023/10/05/invista-decision-to-close-orange-facility-catches-many-by-surprise/
September 21, 2023
Visit Everchem in Media, PA
Made it to the big board . . .
September 5, 2023
Olin Upgrade
Olin upgraded to Overweight at KeyBanc on valuation
Sep. 05, 2023 8:44 AM ETOlin Corporation (OLN)By: Rob Williams NY, SA News Editor
Olin (NYSE:OLN) on Monday was upgraded to Overweight from a previous investment rating of Sector Weight by analysts at KeyBanc Capital Markets. They said a selloff in the chemical company on Friday was unwarranted after announcing the planned departure of CEO Scott Sutton.
“We believe shares have reached attractive levels and justify an Overweight rating,” Aleksey Yefremov, analyst at KeyBanc, said in a September 4 report. “We may be too early, given meaningful pressure on caustic soda, but believe the stock is undervalued with a 12-24 months view.”
KeyBanc set a price target of $67 a share on Olin (OLN) based on a multiple of 6.5 times estimated Ebitda for 2024.
Discussions on Pay?
The analysts said Sutton’s departure may have been related to discussions about pay.
“Our sense is that Mr. Sutton’s initial compensation package reflected turnaround status of the company at the time, while going forward the board prefers pay to be more closely in line with industry standards,” according to KeyBanc. “Mr. Sutton’s compensation was well-earned, and the stock’s reaction is just another testament to investors’ view of his value.”
Amid the pending departure, Olin (OLN) is positioned for growth, according to KeyBanc.
“Mr. Sutton was a highly successful and creative CEO for Olin (OLN), and it will be difficult to find a replacement of a similar caliber, considering the impressive performance improvement that was achieved by Olin (OLN),” KeyBanc said. “Still, having set the major parameters of the new strategy, the company is now ready to rip the benefits of the coming cyclical upside.”
September 1, 2023
Olin CEO to Step Down
Olin Announces CEO Transition Plan
Sep. 01, 2023 7:30 AM ETOlin Corporation (OLN)
CLAYTON, Mo., Sept. 1, 2023 /PRNewswire/ — Olin Corporation (OLN) today announced a mutual agreement that Scott Sutton will step down as President, Chief Executive Officer, and Chairman of the Board in the first half of 2024. Mr. Sutton will continue as Executive Chairman of the Board until his departure to facilitate a smooth transition.
Mr. Sutton has led a strategic transformation of Olin since taking the helm in 2020 which has delivered significant value for Olin’s shareholders. He has embedded the Winning Model across Olin’s businesses and built a strong leadership team for the future.
“It has been a privilege and an honor to lead Olin,” said Sutton. “Olin has a great future ahead and the Board and I are working closely together to identify an excellent leader who will enable the next phase of growth for Olin building on our strong foundation.”
William H. Weideman, Olin’s Lead Director, noted, “On behalf of the Board and the Olin team, I extend our gratitude to Scott for his dedication, leadership and extraordinary contribution. We look forward to working with Scott and the leadership team to ensure a smooth transition.”
COMPANY DESCRIPTION
Olin Corporation is a leading vertically-integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition. The chemical products produced include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach, hydrogen, and hydrochloric acid. Winchester’s principal manufacturing facilities produce and distribute sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
Visit www.olin.com for more information on Olin.
August 8, 2023
Epoxy Highlights from Westlake Earnings Call
Westlake Corporation (NYSE:WLK) Q2 2023 Earnings Call Transcript
Westlake Corporation (NYSE:WLK) Q2 2023 Earnings Call Transcript August 3, 2023 Westlake Corporation misses on earnings expectations. Reported EPS is $2.31 EPS, expectations were $2.83.
Jeff Holy: Thank you. Good morning, everyone, and welcome to the Westlake Corporation conference call to discuss our second quarter 2023 results. I’m joined today by Albert Chao, our President and CEO; Steve Bender, our Executive Vice President and Chief Financial Officer; and other members of our management team. During the call, we will refer to our two reporting segments: Performance and Essential Materials, which we refer to as PEM or Materials; and Housing and Infrastructure Products, which we refer to as HIP or Products. Today’s conference call will begin with Albert, who will open with a few comments regarding Westlake’s performance. Steve will then discuss our financial and operating results, after which, Albert will add a few concluding comments, and we will open the call up to questions.
Albert Chao: Thank you, Jeff. Good morning, everyone. We appreciate you joining us to discuss our second quarter 2023 results.
For the second quarter of 2023, we reported sales of $3.3 billion, net income of $297 million and EBITDA of $690 million. In our PEM segment, the continuation of soft industrial and construction activity and unplanned maintenance activities drove sales volume declines, particularly impacting PVC resin, caustic soda and epoxy in North America and Europe. The elevated level of unplanned outages resulted in lost sales that impacted operating income by approximately $50 million.
While our PEM segment average selling prices were lower than in the first quarter. We benefited from our strategically located globally advantaged feedstock position in North America, where we saw lower feedstock and fuel costs compared to the first quarter. In our HIP segment, we experienced an increase in sales volumes quarter-over-quarter with the start of the construction season in North America with housing starts in the second quarter, averaging 1.4 million units and repair and modeling continuing to grow. HIP segment EBITDA margin increased sequentially due to the 13% volume improvement and raw material cost reductions. And its margin remained in line with the record second quarter of 2022 at approximately 22%, reflecting the strength in our branded products and relationships with our customers.
While we expect the challenging macro backdrop to continue in the third quarter, we will focus our efforts of operating our assets reliably and reducing costs. To that end, we now expect our cost reduction program to achieve between $75 million to $105 million of cost savings in 2023, up from the previous $55 million to $105 million target after we achieved approximately $25 million of cost savings in the second quarter and $50 million in the first half of 2023. Overall, our second quarter results reflected the weakness in global manufacturing and industrial activity, along with the impact to sales volumes and margins from the planned and unplanned outages, and we continue to take a disciplined approach to managing our operations in this volatile economy and advance our long-term strategic priorities. I would now like to turn our call over to Steve to provide more detail on our financial results for the second quarter of 2023.
Steve Bender: Thank you, Albert, and good morning, everyone. Westlake reported net income of $297 million or $2.31 per share in the second quarter of 2023 on sales of $3.3 billion. Net income for the second quarter of 2023 decreased $561 million from the second quarter of 2022 as a result of lower average selling prices and integrated margins and more production and sales volumes. When compared to the first quarter of 2023, net income decreased by $97 million in the second quarter of 2023, primarily to lower average selling prices, particularly for caustic soda, PVC resin due to softer market conditions and unplanned production outages. For the second quarter of 2023, our utilization of the FIFO method of accounting had a negligible impact on pre-tax earnings compared to what earnings would have been reported on the LIFO method. This is only an estimate and has not been audited. Moving to our segment performance.
Our performance in Central Materials segment’s second quarter 2023 sales were $2.1 billion with EBITDA of $435 million compared to EBITDA of $1.2 billion in the second quarter of 2022 due to lower average selling prices, particularly for Performance Materials in addition to lower sales volume, largely in PVC and epoxy. PEM segment EBITDA of $435 million in the second quarter decreased $180 million from the first quarter of 2023, largely due to lower average selling prices for both Performance Materials and essential materials particularly for caustic soda, epoxy resins and polyethylene. Lower demand and resulting in sales volumes, particularly, for PVC, caustic soda and epoxy resin, and elevated level of unplanned outages that impacted both sales volumes and integrated margins.
Albert Chao: Thank you, Steve. Looking ahead, with continued high interest rates and a slowing economy we’re expecting a challenging environment in the second half of this year. However, we remain confident in our long-term growth plans, the strength of our business portfolio and our disciplined approach to creating long-term value. We look to expand our sales through differentiated product offerings and innovations with sustainable products to meet our customers’ needs on managing our costs and adapting to the changing market conditions as they unfold. In our PEM segment, we will leverage our North American feedstock advantage and highly integrated production chain. We remain positive on the outlook for our PEM segment, driven by increased consumer activity and demand for clean, fresh water, electrification and renewable energy benefits from the Infrastructure Investment Act and Inflation Reduction Act and favorable demographic trends, all driving demand for PVC resin, caustic soda, polyethylene and epoxy.
While PEM average selling price ending in June were below the average selling prices of the second quarter, in the last few weeks, we have seen some signs of improvement in both PVC resin and polyethylene markets from tightening export markets with unprofitable high-cost international producers curtailing production and lower industry inventory levels. As a result, we remain constructive on the outlook for our PEM segment from recent levels.
Patrick Cunningham: Got it. That’s helpful. And then what’s driving the weakness in epoxies and how do you see demand trending by region for the balance of the year?
Albert Chao: Yes. Epoxies applies to many areas, mostly into the industrial coatings and also in windmill blades and lightweighting of vehicles. And windmill blades business is still coming back slow demand, especially China. China has one of the largest capacities in the world in Epoxie and China’s economy is really not growing much and there’s overcapacity of new plants coming on. So the business is very weak and impacted global. And we expect US, European policy man pick up in the coming quarters or years, but it takes a while. China is the main issue we have.
Kevin McCarthy: That’s helpful. And then as a second question, Albert, I would appreciate any updated thoughts you might have on China. Generally speaking, we’ve seen demand from China languish across many commodity chemical markets. In the markets where you compete, are you seeing any signs of improvement there following recent efforts to stimulate or for that matter, any improvement on the supply side dynamics in China?
Albert Chao: China is the elephant in the room. It has the largest capacity produce many of the chemicals and plastics as well as one of the largest market for it, and as we all know that China did not recover much since the Chinese New Year, people expected after coming out of the pandemic. And the economy is still quite weak. As a result, polymers and chemical market prices has dropped a lot and impact global prices as well. Not only that, they used to import products and now they’re being exporting products. So all that impacted global prices for those products. And as we’re aware that the economy, especially for unemployment for young people has been quite surprisingly high, and recently, the Chinese Government have made a statement, they are coming up with policies to stimulate, but those statement has not come out with concrete actions, specific action plans yet. But I think with Chinese — I presume leadership in China as they said very well the issues. And the central government is still quite well off. They have a lot of buyer power to do things. So we believe that over time, the Chinese economy will improve and they talk about targeted 5% GDP growth for the near term coming years. So time will tell, but the meantime, as Steve mentioned, the spot price has really bottomed out in China. We see coupled with some planned issues with turnaround all that, that there the prices have started moving up the last several weeks. We hope that will be sustained, especially during the third quarter, which is usually a busy quarter. So time will tell, but we think China should improve over time.
Michael Leithead: Great. Thank you. Good morning, guys. My first question on PEM and maybe sticking on the last topic. Your slides talk about competitively priced exports out of China for epoxy and when you sort of do the back of the envelope math, it seems like producers there are selling export products below cash breakeven levels, so how do you think this dynamic or down cycle plays out? And does it change at all how you approach…
Albert Chao: Certainly, some of the Chinese — depending on the industry, definitely in the integrated ethylene to polyethylene, our information shows that in to the present China based on naphtha cracking are losing cash, whereas the US integrated players are still based on ethane feedstock ethylene up, we still have very good cash margin. So — but in business like epoxy, where they have built additional capacities. Some of the Chinese plants are running below 50%. And some new plants have not started up – idle and starting up. So I think companies are adjusting to the new dynamics. And over time, they should make the right decisions, what to do with their businesses.
https://finance.yahoo.com/news/westlake-corporation-nyse-wlk-q2-080908280.html
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