Trinseo evaluates sale of SM/PBR assets in Germany

Trinseo, a manufacturer of plastics, latex binders, and synthetic rubber, says that it is looking at disposing its styrene monomer assets in Boehlen, Germany, and its polybutadiene rubber (nickel and neodymium-PBR) assets in Schkopau, Germany. The combined Adjusted EBITDA of these operations in 2019 was approximately negative US$18 million. It added that these steps followed a thorough analysis and pursuit of numerous alternative options for improving the financial performance and competitiveness of these facilities.

The Boehlen, Germany styrene facility has capacity of approximately 300 kilotonnes. Average production over the past three years was approximately 200 kilotonnes, below capacity due to several factors, including upstream supply issues. In 2019, production was approximately 150 kilotonnes reflecting the previously disclosed unplanned outages. The Schkopau polybutadiene rubber line has capacity of approximately 30 kilotonnes. Trinseo says it will continue its other operations at the Schkopau site, including polystyrene, SSBR, and ESBR.

Meanwhile, in its other financial results, with a strong start to the year in January and February, weaker business conditions started to emerge in mid-March, particularly in the automotive and tyre markets. However, Trinseo adds that there has been relative strength in polystyrene and latex binders into food packaging applications as well as Performance Plastics into medical applications.

From a production standpoint, Trinseo says it has been able to continue operations at all of its manufacturing locations other than its API Plastics site in Mussolente, Italy, which is complying with a government mandated closure of all non-essential commercial activities throughout the country.

Frank Bozich, President/CEO of Trinseo, commented, “As the coronavirus pandemic has spread from China and Asia, to Europe and the Americas, Trinseo has been actively responding through our crisis management plan and adjusting our business operations accordingly. We are taking decisive action to adapt to the current conditions and are implementing a wide array of safeguards to protect the health of our people. We continue to monitor the situation daily and will take further action as needed.”

Due to the uncertain demand outlook caused by Covid-19, Trinseo is withdrawing its previously issued 2020 full-year financial guidance.

Bozich stated, “In this environment, we are taking aggressive actions to improve cash flow by reducing working capital, capital expenditures, and discretionary spending. We’re reducing our anticipated capital expenditures for 2020 from US$100 million to between US$80 and US$85 million.”

(PRA)

---

Subscribe to Get the Latest Updates from PRA  Please click here