Westlake Announces Strategic Rationalization of North American Chlorovinyl and Styrene Assets
Westlake Corporation (NYSE: WLK) (“Westlake” or the “Company”) today announced the approval of a strategic plan to cease operations of certain North American chlorovinyl and styrene production facilities. This decision is part of Westlake’s ongoing efforts to optimize operations and align its manufacturing footprint with current market conditions in the global commodities chemicals industry.
The planned closures include select facilities within Westlake’s chlorovinyl portfolio and its styrene production operations in Lake Charles, Louisiana. The Company emphasized that it remains committed to supplying customers from its remaining North American and global facilities.
Planned Facility Closures
Westlake has identified three key chlorovinyl production units and one styrene manufacturing unit for cessation:
- Aberdeen, Mississippi – PVC Plant
The Company will cease operations at its polyvinyl chloride (PVC) plant in Aberdeen, Mississippi. This facility has an annual production capacity of approximately 1 billion pounds of suspension PVC resin. - Lake Charles, Louisiana North – Vinyl Chloride Monomer (VCM) Plant
Operations at the Lake Charles North VCM plant will be terminated. The facility has an annual production capacity of approximately 910 million pounds of VCM. - Lake Charles, Louisiana South – Diaphragm Chlor-Alkali Unit
One of the diaphragm chlor-alkali units at Lake Charles South will be closed. This unit has an annual capacity of approximately 825 million pounds of chlorine and 910 million pounds of caustic soda. - Lake Charles, Louisiana – Styrene Plant
In addition to the chlorovinyl units, the Company will also cease operations of its styrene plant at Lake Charles, which has an annual production capacity of approximately 570 million pounds of styrene.
Continued Supply from Remaining Facilities
Despite these closures, Westlake will continue to serve its customers with products produced at the other seven North American chlorovinyl facilities. Following the rationalization, Westlake expects to maintain substantial global and regional production capacities, including:
- Suspension PVC: Approximately 5,520 million pounds globally, including 4,900 million pounds in North America.
- VCM: Approximately 7,630 million pounds globally, including 6,050 million pounds in North America.
- Chlorine: Approximately 6,680 million pounds globally, including 5,410 million pounds in North America.
- Caustic Soda: Approximately 7,510 million pounds globally, including 6,100 million pounds in North America.
These measures ensure that Westlake can continue to meet customer needs while optimizing the efficiency of its North American operations.
Timeline for Closures
The cessation of operations at the affected facilities is expected to occur in December 2025. Westlake is committed to executing these closures in a structured and responsible manner to minimize disruption to both customers and employees.
Workforce Impact
The planned closures will result in a workforce reduction of approximately 295 employees. Westlake expressed deep appreciation for the contributions of all employees impacted by this decision. The Company emphasized its commitment to providing support and assistance to help employees transition during this period.
Jean-Marc Gilson, Westlake President and Chief Executive Officer, stated:
Given the persistent, challenging market conditions facing the global commodities chemicals industry, as part of our evaluation of business operations, we have made the difficult decision to cease operation of three units within our North American Chlorovinyls business and cease operations of our Styrene manufacturing unit, located in Lake Charles, Louisiana. We will continue to supply our chlorovinyl customers with products produced at our other North American Chlorovinyls manufacturing facilities. I want to recognize the dedication and contributions of all our employees, including the ones who will be leaving us. We appreciate their contribution over the years. We are committed to treating everyone impacted with respect and our focus is on supporting them through their transition.
Financial Considerations
Westlake anticipates total pre-tax costs of approximately $415 million related to the planned closures. These costs include:
- Non-cash accelerated depreciation, amortization, and asset write-off charges: Approximately $357 million.
- Employee severance and separation costs: Approximately $25 million.
- Other plant shutdown costs: Approximately $33 million.
A substantial portion of these costs is expected to be recognized in the fourth quarter of 2025, although the associated cash outflows will be spread over several years as the closure process concludes.
Strategic Rationale
The rationalization plan reflects Westlake’s ongoing efforts to optimize its manufacturing footprint in response to persistent challenges in the global commodities chemicals market. By focusing on its most competitive facilities, Westlake aims to enhance operational efficiency, reduce excess capacity, and maintain the ability to serve customers reliably.
This decision is part of a broader strategic approach to strengthen the Company’s position in key product lines, including PVC, VCM, chlor-alkali products, and styrene. Westlake continues to monitor market dynamics closely and evaluate opportunities to further optimize its operations.
Commitment to Stakeholders
Westlake highlighted that the closures, while difficult, are undertaken with a focus on long-term sustainability and value creation for stakeholders. The Company remains committed to maintaining strong customer relationships and ensuring the continuity of supply.
The Company also emphasized its responsibility to its employees, pledging to provide support, guidance, and resources to those affected by the closures.
Summary
- Westlake will cease operations at select chlorovinyl and styrene facilities in Mississippi and Louisiana.
- The closures are expected to be completed by December 2025 and will affect approximately 295 employees.
- Total pre-tax costs associated with the closures are estimated at $415 million, including depreciation, severance, and shutdown costs.
- The Company will continue to supply products from its remaining North American chlorovinyl facilities, ensuring uninterrupted service to customers.
- This strategic move reflects Westlake’s commitment to operational efficiency and long-term competitiveness in the global chemicals industry.
Westlake remains focused on executing the closure plan responsibly while maintaining strong support for employees and continuing to provide high-quality products to its customers.
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