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Celanese initiates shutdown of Mexico manufacturing facility

July 08/2019

MOSCOW (MRC) -- Celanese Corporation, a global chemical and specialty materials company, has announced a further consolidation of its global acetate manufacturing operations by initiating the shutdown of its manufacturing facility in Ocotlan, Jalisco, Mexico, as per the company's press release.

The consolidation is designed to strengthen the company's competitive position, reduce fixed costs and align future production capacities with anticipated industry demand.

Previously in June of 2018, Celanese announced it would discontinue the production of acetate tow at the Ocotlan facility. Today, Celanese is announcing that it will also discontinue the production of acetate flake at the Ocotlan site, essentially ceasing all manufacturing operations at the facility by October 31, 2019.

Marcel van Amerongen, Vice President of Celanese's Acetate Tow business, stated: "With China manufacturers completing plans for expanding acetate flake capacity in 2020, demands for imported flake will be reduced significantly. This, in combination with our ability to source additional volumes from our Narrows, Virginia facility, supports our decision to completely shut down our Ocotlan facility. This decision allows Celanese to further optimize cost and footprint as part of the long-term strategy for our acetate business to maintain its competitive position in the marketplace."

The company will continue to serve its global acetate tow customers via its wholly owned facilities in Lanaken, Belgium, and Narrows, Virginia, USA, as well as through the company's acetate tow joint venture partners in China.

Celanese has taken steps to strengthen its competitive position in the acetate tow market by lowering raw materials cost, reducing fixed costs and aligning with anticipated industry demand trends, such as optimizing production across all acetate tow manufacturing locations, as well as having made significant capital investments in the company's manufacturing operations.

Van Amerongen concluded: "This was an extremely difficult decision given the impact to our employees and the local community, and we are dedicated to making this transition as smooth as possible. All impacted employees will be eligible for a comprehensive package of benefits which includes outplacement assistance, generous severance pay and other benefits intended to help individuals and families make a successful transition to the next phase of life. Today's action is not a reflection of the quality of work performed by our employees at the Ocotlan site or the ongoing work performed by our employees in other acetate production sites, but instead the result of the critical evaluation of all strategic options to ensure the continued success of our acetate tow business."

Financial details regarding this action will be disclosed in upcoming periodic reports as required by the US Securities and Exchange Commission.

As MRC informed before, Celanese Corporatio has increase May list and off-list selling prices for Vinyl Acetate Monomer (VAM) sold in Europe, the Middle East, Africa and Asia Outside China (AOC). The price increases below were effective for orders shipped on or after 24 April, 2019, or as contracts otherwise allow, and are incremental to any previously announced increases. Thus, VAM prices rose, as follows:

     - by EUR100/mt - for Europe, the Middle East & Africa;
     - by USD50/mt - for AOC.

Celanese Corporation is a global technology leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Based in Dallas, Celanese employs approximately 7,600 employees worldwide and had 2017 net sales of USD6.1 billion.
Author:Margaret Volkova
Tags:vinilacetat, EVA, fibers/filaments, adhesives, Celanese, Mexico, USA.
Category:General News
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