November 07, 2024 – The chemical industry is currently grappling with severe challenges posed by a multitude of macroeconomic factors, including overcapacity and sluggish demand. In response to these market difficulties, numerous chemical companies have been forced to make difficult decisions, such as permanently closing factories, delaying or canceling projects, shutting down plants, and abandoning new business directions with slow growth. These measures are aimed at streamlining and reorganizing operations to concentrate resources on core and potential businesses. Previously, Chemical New Materials reported on a wave of closures among chemical giants like Solvay, BASF, Dow, and Ascend Performance Materials. Recently, this trend has continued to spread.
Celanese, a global leader in acetyls and engineered materials, has recently announced several cost-cutting measures. Due to its third-quarter adjusted earnings falling far short of expectations, the company plans to significantly reduce its quarterly dividend in the first quarter of 2025 and idle some of its factories worldwide to lower manufacturing costs. According to Color Master batch Industry Network, Celanese’s third-quarter adjusted earnings per share were 2.44,significantly below the previously guided range of 2.75 to 3.00.To reduce debt,the company plans to idle factories to decrease inventory by the end of 2024,anticipating a 200 million inventory release in the fourth quarter. Additionally, Celanese has initiated a plan to cut costs by over $75 million by the end of 2025 and has set its capital expenditure target for 2025 below the 2024 level.
Another chemical giant, Ineos, is also facing similar difficulties. Due to intensifying competition in the ABS market, Ineos Styrolution has decided to close its ABS production facility in Addyston, Ohio. The facility will begin decommissioning in the second quarter of 2025, while Ineos will continue to serve the North American ABS market through its North American production facilities and global network. Ineos stated that this decision was made after a comprehensive analysis, as continuing to operate the facility profitably would require significant investments in cost competitiveness, making the site no longer economically viable. Meanwhile, competition from overseas imports and intensifying domestic competition were also significant factors influencing this decision.
It’s worth noting that this is not the first time Ineos has closed a factory this year. Previously, Ineos Olefins & Polymers UK announced the closure of its ethanol plant in Grange mouth, Scotland, in the first quarter of 2025, and Ineos Styrolution also announced the closure of its styrene production site in Sarnia, Ontario, Canada, by June 2026. These measures are all aimed at addressing the challenges of sluggish market demand and overcapacity to ensure the long-term stable development of the enterprises.