Chemical and advanced materials maker, Celanese CorporationCE has confirmed that it will permanently reduce 50% capacity at its Lanaken, Belgium, acetate tow production facility. This action reflects consistent lower global demand for acetate tow products, mainly in Europe.
According to Scott Sutton, president, Materials Solutions for Celanese, lower geographic demand, expected industry consumption patterns and high costs at the site led the company to execute the planned 50% capacity cut at the Lanaken facility. However, management has already consulted representatives of the affected employees and come up with a social plan to reduce the impact of these restructuring measures on them.
Celanese further notified that it will continue supplying customers with produce from its acetate tow facilities in Narrows, VA and Ocotlan, Mexico. Additionally, it will draw upon the remaining capacity at the Lanaken site in Belgium which operates at an annual capacity of around 26,000 tons.
Through these restructuring efforts, Celanese anticipates exit costs of nearly $35-$40 million, with the majority of cash outflows occurring over the next six months. These costs will be eliminated from the company's adjusted earnings per share and operating EBIT measures.
Shares of Celanese fell 0.2% to close at $70.59 on Dec 1.
Celanese currently sports a Zacks Rank #1 (Strong Buy).
Other well-ranked companies in the diversified chemical space include Innospec Inc. IOSP , Akzo Nobel N.V. AKZOY and The Dow Chemical Company DOW . While Innospec sports a Zacks Rank #1, both Akzo Nobel and Dow carry a Zacks Rank #2 (Buy).
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