Global PVC Market Slumps! Westlake Chemical Plans To Shut Down Three Vinyl Chloride-Related Facilities In The United States (US) And Completely Exit Styrene Business

On December 16, Specialized Plastics World learned that Westlake Chemical announced on December 15 its decision to shut down three vinyl-related production plants and one styrene plant in the United States this month to enhance the profitability of its Performance and Basic Materials (PEM) division. The company stated that it will continue to supply polyvinyl chloride (PVC), vinyl chloride monomer (VCM), and chlor-alkali products through seven other vinyl production facilities in North America, but will completely exit the styrene business.

"Due to the global oversupply of certain materials (mainly in the chlorvinyl industry chain and styrene), the earnings and profit margins of the PEM division have fallen to unacceptable levels," said President and CEO Jean-Marc Gilson during a special conference call.

Westlake Chemical reported in its third-quarter financial results that it has recognized a non-cash impairment loss of $727 million related to the goodwill of its North American vinyl chloride business. The adjusted EBITDA for the PEM segment in this quarter was $90 million, a significant decline from $297 million in the same period last year; the adjusted EBITDA margin was 5%, down from 15% in the same period last year.

"We anticipate that starting from 2026, these initiatives will bring approximately $100 million in annual EBITDA benefits to the PEM division by reducing exposure to low-price export markets," said Gilson. "In 2026, by avoiding capital expenditures and equipment maintenance costs, it's expected to save an additional $75 million in cash, achieving a total of approximately $175 million in free cash flow savings."

The factories planned to be closed include: the suspension PVC plant in Aberdeen, Mississippi (annual capacity of 450,000 tons), the VCM plant in Lake Charles, Louisiana (annual capacity of 413,000 tons), the diaphragm chlor-alkali facility in Lake Charles (annual capacity: chlorine 375,000 tons, caustic soda 413,000 tons), and the styrene plant in Lake Charles (annual capacity of 259,000 tons). This closure will affect approximately 295 employees' jobs.

Xihu Chemical pointed out that all planned closures of the vinyl chloride factories are aimed at the export market. In addition, the Aberdeen PVC factory faces high logistics costs due to the need to procure raw materials from external sources, further exacerbating its operational disadvantages.

The company stated that after closing the aforementioned plant, its global capacity will be adjusted to: suspension PVC annual capacity of 2.5 million tons (of which 2.2 million tons in North America); vinyl chloride monomer (VCM) annual capacity of 3.5 million tons (of which 2.7 million tons in North America); chlorine annual capacity of 3 million tons (of which 2.5 million tons in North America); caustic soda annual capacity of 3.4 million tons (of which 2.8 million tons in North America).