Engineering News

Lyondell may see more plant shutdown charges-filing
Wed Nov 9, 2005 06:56 PM ET

NEW YORK, Nov 9 (Reuters) - Lyondell Chemical Co. could see charges of up to $160 million for additional costs associated with the shutdown of a foam chemical plant in Lake Charles, Louisiana, the company said in a filing on Wednesday.

The plant, which Lyondell found unprofitable, was damaged by Hurricane Rita and shut down Sept. 20. The No. 3 U.S. chemical maker blamed high energy and raw material costs, along with the storm damage.

The potential costs are in addition to a pretax charge of $195 million, or 49 cents a share, which the company announced last month to cover the carrying value of the plant and related assets.

The latest costs involve ending the plant's "commercial arrangements," such as supply contracts and janitorial services, a company spokeswoman told Reuters.

Lyondell, in its third-quarter filing Wednesday, said the costs could amount to nothing or run as high as $160 million. The company spokeswoman did not know when the charges against earnings might occur.

"However, these costs are not expected to be in the upper portion of that range," Lyondell said in the filing.

The plant makes TDI, or toluene diisocyanate, a key component for the production of foam and sealant products.

Source: Reuters

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