1/7/2014

Lion Copolymer to shut down SBR facility temporarily

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By Mike McNulty

BATON ROUGE, La.—Two Lion Copolymer Ltd. production plants are heading in different directions.

The synthetic rubber manufacturer plans to temporarily close its Baton Ridge styrene-butadiene rubber production facility by Feb. 3 because of poor economic conditions in some segments of the rubber industry.

Meanwhile, the company is making more investments at its EPDM manufacturing plant in Geismar, La., after completing a major expansion at the site in 2012.

Duration of the Baton Ridge facility closure has not been determined.

The plant is also capable of producing nitrile rubber, but the firm did not indicate if production of the material would continue at the site while it is idled.

“Declining market conditions for domestically produced replacement tires and conveyor belting, global overcapacity of SBR supply and volatility in key raw materials have resulted in unfavorable SBR market conditions in recent years,” according to Lion Copolymer President Jesse Zeringue.

Because of that, he said, the company's SBR business has not generated the returns needed to support the reinvestment required to sustain the business adequately.

Lion Copolymer did not say how many workers will be impacted by the closure, but Zeringue said the company, which is owned by Goradia Capital L.L.C., “will work with its employees during the difficult transition.”

He said the decision to temporarily discontinue its operation of the SBR business “is a difficult one, realizing the impact to our employees and their families, and to our customers who have been with us for decades.”

Established in 1943 by the U.S. government to produce synthetic rubber materials during World War II, the Baton Rouge plant is one of the world's first commercial producers of synthetic rubber.

It formerly operated under Copolymer Rubber and Chemical Corp. and DSM Copolymer. Lion Copolymer acquired the SBR business from DSM in 2005.

The facility pioneered the continuous, cold-rubber emulsion SBR process and carbon black master batches, the firm said.

While the company is halting production at the Baton Rouge site, its Royalene EPDM facility in Geismar, with a work force of about 115 and 150 permanent contractors, and it will continue its normal operations as the firm moves forward with plans to bolster the business.

Lion Copolymer completed a $70 million capacity expansion at the facility in 2011 and 2012, increasing capacity to 285 million pounds from 205 million pounds while it implemented additional cost-enhancement projects.

It said that continued support and growth of the plant, which it purchased from Chemtura Corp. in 2007, is planned, and additional expansions and investments were underway at the facility.

However, it did not elaborate or furnish specifics about the projects.