MOSCOW (MRC) -- Trinseo (Berwyn, Pennsylvania) has joined the growing ranks of chemical companies providing financial and operational updates in response to the coronavirus disease 2019 (COVID-19) pandemic, reported Chemweek.
Like many of its peers, the company announced that it is drawing USD100 million on a revolving credit facility “out of an abundance of caution.” Trinseo says all of its manufacturing facilities remain online except the API Plastics site in Mussolente, Italy, which has been closed by the government as a nonessential business.
Trinseo says it ended 2019 with USD1,195 million of debt and USD456 million of cash, and it expects to end the first quarter with approximately USD425 million of cash, which excludes the USD100-million revolver drawdown. No amounts were previously outstanding on the revolving credit facility, says the company. Declining feedstock prices and inventory management are also expected to free over USD100 million in working capital during the second quarter.
"In this environment, we are taking aggressive actions to improve cash flow by reducing working capital, capital expenditures, and discretionary spending," says Frank Bozich, president and CEO. "We’re reducing our anticipated capital expenditures for 2020 from USD100 million to between USD80 and USD85 million."
The company also provided an update on the status of its styrene monomer assets in Boehlen, Germany, and its polybutadiene rubber (nickel and neodymium-PBR) assets in Schkopau, Germany. Consultations with the Economic Council and Works Councils of Trinseo Deutschland regarding their disposition began in March. The combined adjusted EBITDA of the two operations last year was approximately negative USD18 million, according to Trinseo, which says it “continues to be committed to its other operations at the Schkopau site,” including polystyrene and styrene-butadiene rubber.
As MRC reported earlier, Trinseo and its affiliate companies in Europe have announced a price reduction for all polystyrene (PS) grades in Europe. Effective March 1, 2020, or as existing contract terms allow, the contract and spot prices for the products listed below went down as follows:
-- STYRON general purpose polystyrene grades (GPPS) -- by EUR65 per metric ton;
-- STYRON and STYRON A-Tech and STYRON X- Tech high impact polystyrene grades (HIPS) - by EUR65 per metric ton.
According to ICIS-MRC Price report, prices of Russian PS remained unchanged until the end of the first quarter. Nizhnekamskneftekhim rolled over February prices of its material for shipments in March. Penoplex and Gazprom neftekhim Salavat also maintained their GPPS prices the same.
Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.6 billion in net sales in 2018, with 16 manufacturing sites around the world, and approximately 2,500 employees.
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