Total to shut naphtha cracker in East France, invest in polymers

05-Sep-13

Total plans to shut, by H2-2015, a money-losing steam cracker at Carling in France and invest €160 mln (US$211 mln) in making resin and polymers at the site in a bid to boost profitability of petrochemicals production, as per Bloomberg. The investments at the site will include the creation of a thermoplastics unit, making innovative plastics for the car industry, the reinforcement of its polystyrene production and an upgrade of its polyethylene production unit. The northeastern steam cracker is losing about €100 million per year, unions have said. The Carling site will become Total’s European center for resin production through its Cray Valley company. The move will ensure delivery to local customers of ethylene and propylene that was made by the steam cracker. Cray Valley specializes in the production of resins for adhesives, automotives and electronics like touch-screen tablets, it said. Lack of investment and a rapid souring of the market led to a decline of activity at the site. “The European petrochemicals market is facing continued overcapacity and growing international competition,” said Patrick Pouyanne, Total’s head of refining and chemicals. Hydrocarbon resins and polymers are “promising” markets. Total has had to tread carefully in announcing job losses amid government pressure to keep industrial production in France and after a battle with unions over the shutdown of the Flanders refinery. Changes at Carling are part of a wider reorganization of Total’s refining and petrochemicals businesses. Total is looking at a 5% hike in 2015 downstream profitability compared with 2010 and has promised to reduce European refining and petrochemicals exposure by 20. It is focusing on six facilities including Normandy in France as well as plants in Saudi Arabia, Qatar, South Korea and Port Arthur in the U.S. Europe accounts for 56% of Total’s petrochemicals capacity.