Westlake “will evaluate options as we go” regarding a potential separation of its commodity chemicals business, executive board chairman Albert Chao told analysts during the US-based chemical company’s Q3 earnings call on Thursday.An analyst asked Chao whether Westlake may at some point separate the petrochemicals from the building products business, given the current pressures on commodity chemicals.Chao said that from a valuation perspective, the two businesses were different.“We are hoping that the market can see the sum of the parts, but we will evaluate options as we go,” he said.At this time, Westlake continues to believe in the strength and synergies of the two businesses being together, with the petrochemicals operations being a major supplier to the construction and building products business, he said.With an expected improvement in the global supply/demand balance over the next few years and with the cost-restructuring of Westlake’s US polyvinyl chloride (PVC) operations, the company would be in a better position to serve customers domestically and overseas, he said.Lower US interest rates would boost housing and construction activity and help improve both Westlake’s PVC and its Housing and Infrastructure Products (HIP) businesses, he added.In Q3, Westlake took an impairment charge of $727 million representing all of the goodwill associated with its North American chlorovinyls business.The charge was triggered by the extended trough conditions in chlorovinyls, but there was no impairment of the assets themselves, which signaled that the business should perform well over the medium to long-term, chief financial officer Steve Bender said.Bender did not say whether Westlake had an opportunity to bid for the OxyChem business, but he said that Westlake was “a large player” in that business and had to be mindful that a such a large transaction could raise concerns among competition regulators.
We remind, Westlake Chemical announced its decision to completely close its Pernis plant in the Netherlands. This move was made amid macroeconomic challenges in Europe. The Pernis plant produces liquid and solid epoxy resins, as well as bisphenol A (BPA). The company had previously mothballed its allyl chloride and epichlorohydrin production lines.
mrchub.com