Westlake Chemical Corp.’s North American Pipe Corporation subsidiary has shut down its Springfield, Ky., PVC pipe production facility in an effort to reduce costs and optimize production operations as a result of excess capacity in the PVC pipe market. The Springfield site is one of the company's smallest pipe facilities. Customers currently being serviced from Springfield will not experience any supply disruption and will now be served through North American Pipe's other PVC pipe plants. Impairment and shutdown-related costs are expected to negatively impact Q2-2011 pre-tax earnings by approximately US$4 mln.
During the second quarter of 2011 the company’s Lake Charles, Louisiana facility has also been negatively impacted by an unscheduled outage caused by a weather related power supply failure from a third party power provider, resulting in reduced production and repairs at an ethylene unit. The lost production, repair costs and other expenses resulting from this event are estimated to lower Q2-2011 pre-tax earnings by approximately US$10 mln. Proceeds from insurance recoveries are expected to offset a majority of this impact in future periods.