Jan 24 2006
NOVA Chemicals Corporation today announced it plans to close its Chesapeake, Virginia, site in 2006. The plant has solid polystyrene production capacity of 300 million pounds (136 kilotonnes) per year and compounding capability of 170 million pounds (77 kilotonnes) per year.
“We continue to drive cost improvements in our Styrenics business as aggressively as possible. We were able to take this step because upgrades to the Performance Products operations at our Belpre, Ohio, site freed up capacity at other locations,” said Chris Pappas, President of NOVA Chemicals’ Styrenics business. “We remain firmly committed to ZYLAR® and our other compounded products and plan to identify production alternatives in 2006. We will also work to make this transition seamless for our customers and as successful as possible for our affected employees.”
NOVA Chemicals also announced the intent to close its Chesapeake Technology Center and consolidate its U.S. Styrenics Technology organization at the company’s Beaver Valley site in Monaca, Pennsylvania, in 2006.
The closures are expected to reduce costs by approximately $15 million per year and will also have the benefit of reducing working capital requirements. NOVA Chemicals will take a non-cash, after-tax charge of approximately U.S. $46 million in the fourth quarter of 2005 due to the Chesapeake closure. Additional closure costs of approximately U.S. $10 million after-tax will be accrued during the first quarter of 2006.