Petromont to indefinitely suspend production at Quebec

25-Feb-08

With effect from 30 Apr 2008, Petromont and Co. will indefinitely suspend production of polyethylene (PE) and ethylene at its site in Quebec, Canada. The facilities comprise a 655 mln lb/y ethylene unit in Varennes and 615 mln lb/y high density PE unit in Montreal East. Petromont is a 50:50 joint venture between Dow Chemical Co and state-controlled Ethylec Inc,. Various factors are responsible for closure including problems in procuring competitively-priced petroleum-based feedstock, the unfavourable effects of a strong Canadian dollar vs the weakening US dollar, and the challenging conditions effecting the North American petrochemical sector. The closure has also been affected by the recent decision by Basell to shutter its nearby polypropylene facility. Currently, Petromont seems willing to leave the plant in one piece in the event of an improvement in market conditions or finding a potential buyer for the business. Inclusive of this plant, more than 2 bln lbs of commodity resin capacity has been earmarked for closure in Canada in the past 18 months.