Olin Announces Closure of Epoxy Facilities as Part of Restructuring Push
- 22-Mar-2023 6:18 PM
- Journalist: Jung Hoon
Netherland: OLN has announced that it will be shutting down its Epoxy facilities located in Terneuzen, Netherlands; Gumi, South Korea; and Guaruja, Brazil. This restructuring program is expected to incur around $57 million of charges in Q1 2023, including $15 million non-cash asset impairment charges. The cash-based charges are projected to be paid off within the next three years.
Olin is taking proactive steps to tackle the current softness in demand for Epoxy and oversupply issues in the market. The organization remains dedicated to evaluating and executing further measures that will optimize its business and ensure reinvestment economics throughout its Epoxy portfolio across the globe.
Shares of Olin have increased by 0.9% over the past year, while its industry has declined 5.5%. During the fourth quarter of 2022, revenues within the company's Epoxy division were reported at $484.2 million - a 39% decrease compared to the same period last year due to lower volumes.
The company has indicated that they expect weak economic conditions to remain in place. On its fourth-quarter call, the company revealed that it's forecasting their adjusted EBITDA to be between $1.5-$2 billion for 2023. Additionally, their adjusted EBITDA is projected to experience a marginal decrease when compared quarterly for the first quarter.
The company anticipates that its chemical businesses will be adversely affected by the ongoing weakness of European and North American Epoxy demand, as well as low vinyl intermediate requirement in early 2023. This is compounded by the large number of Chinese exports caused by the persisting sluggishness in domestic demand in China.