Until further notice, Westlake Chemical (Houston, Texas / USA; www.westlakechemical.com) has ceased all PVC pipe production at its plant in Springfield, Kentucky / USA. The group blamed pipe market overcapacities for its decision, and spokesman David Hansen told Plasteurope.com that “as soon as demand picks up again, we will reevaluate the situation.”

Springfield is one of Westlake’s smaller sites, producing construction materials made of PVC (including pipes, fences as well as window and door profiles). The group operates another 10 plants in the US, eight of which manufacture only pipes. With Springfield out of the picture, Westlake loses about 40,000 t/y of its annual construction materials capacity of roughly 520,000 t/y.

Looking at the shrinking volumes sold over the past few years, the market overcapacities become all the more apparent. Whereas Westlake still sold roughly 350,000 t worth of material in 2006, that number dropped to 270,000 t in 2010 – which means capacity utilisation levels barely exceed 50%. Since 2007, Westlake has shuttered two pipe plants as well as one facility producing window and door profiles – acts prompted by the weak construction activity, especially in the private sector.

Westlake’s PVC construction material sales recovered somewhat last year, reaching USD 352m (2009: USD 315m), but still remain significantly below the USD 428m generated in 2008. Last year the VCM/PVC chain revenues stood at USD 910m (2009: USD 714m), but the negative operating result of USD -57m achieved in 2009 only worsened last year, reaching USD -62m. By comparison, Westlake’s Olefin business – which generated sales of USD 2.26 bn last year – is flush with money with sales reaching USD 460m (2009: USD 177m).