Inovyn to Close German PVC Plant

17.09.2015 -

Inovyn does not plan to restart its PVC plant at Schkopau, Germany, idled since the end of 2014. After failing to come to terms with Dow Chemical on supply of feedstock VCM, the recently launched 50:50 joint venture of Ineos and Solvay said it will now “pursue a plan for permanent closure.”

In return for the European Commission’s clearance of the joint venture, Ineos had initially planned to divest the plant with a nameplate capacity of around 300,000 t/y; however, the final remedy package instead called for the divestment of the plant at Wilhelmshaven, Germany.

The slightly larger Wilhelmshaven facility was acquired at the beginning of August of by International Chemical Investors Group (ICIG), which has made it a cornerstone of its new vinyls platform Vynova. During the EU’s review of the Ineos-Solvay vinyls merger plan, another German PVC producer, Vestolit, currently in the hands of private equity investor Strategic Value Partners (SVP), had expressed interest in the Schkopau facility.

Jeff Seed, Inovyn’s managing director for the Schkopau site, said, “it is extremely disappointing that we have been unable to agree a competitive long-term supply contract with DOW. With no contract in place, the operations at Schkopau are no longer economically viable and we have no option but to plan for closure.”

Inovyn said it will continue supplying customers by sourcing PVC from other production sites within its extensive network.

Seed also pointed to repercussions for other companies at the site built up by Dow in the 1990s after taking over parts of the former East German combine from the Treuhandanstalt, which administrated the wrap-up of operations following German reunification in 1990.

The future of the East German site looks murky. It is unclear what effect the nearly year-long outage at the former Ineos production facility has had or what repercussions its permanent closure will have on other related businesses at Schkopau. German vinyls specialist Vinnolit, for example, produces PVC paste in a plant acquired from Ineos.