Bogged down by high costs and overcapacity in the system, Canada's only polystyrene production facility will close by year-end. Nova Chemical Corp. had partnered with global petrochemicals giant Ineos to create Ineos Nova. The Montreal facility produces 54 million kilograms of polystyrene annually, compared with 360 million kilograms by largest plant. The size of the plant is so small that it is only a fraction of the size of the world-scale plants, making it difficult for the fixed costs to be spread over production. The Montreal plant was also expanded in 1997 in an attempt to achieve greater efficiences. But workers were unable to overcome its small size.
The closure will cut six per cent of the joint venture's polystyrene production and is part of a restructuring that aims to achieve about US$50 million in annual synergies.
Montreal's production will be transferred to Ineos Nova's other plants in Illinois, Massachusetts, Ohio and Alabama. The plant will be dismantled next year and the property will be sold. The company's only other Canadian facility is a plant in Sarnia, Ont. makes styrene as feedstock to manufacture polystyrene, and has been operational since 1977. The plant was upgraded in the late 1990s with state-of-the-art technology to increase annual production of styrene monomer to about 428 million kilograms.