WAYNE, PA — Trinseo (NYSE: TSE), a specialty material solutions provider, announced updates to its asset restructuring initiatives. In aggregate, these actions are expected to result in approximately $60 million of annual profitability improvement versus the fourth quarter run rate, most of which will be realized in 2023. These actions consist of the following:
- Closure of manufacturing operations at the styrene production facility in Boehlen, Germany. The closure is the result of an uncompetitive position in the global styrene market due to the site’s subscale size, industry capacity additions and elevated natural gas prices in Europe.
- Closure of one polycarbonate production line in Stade, Germany due to an uncompetitive position in the global polycarbonate market. The Company will continue to produce polycarbonate for use in its downstream compounding business with the remaining assets. The line closure is expected to result in lower costs and significantly less exposure to the cyclical merchant polycarbonate market.
- Consolidation of the PMMA sheet manufacturing site in Matamoros, Mexico into the continuous sheet manufacturing operation of Aristech Surfaces in Florence, Kentucky.
- Capacity reduction of SB latex at the Hamina, Finland site starting mid-year 2023 due to over-capacity of SB latex in Europe.
Trinseo expects to incur $79 million to $89 million of pre-tax, non-recurring charges related to the cessation of manufacturing activities at these facilities. Of this, $55 million to $61 million is expected to be incurred in the fourth quarter of 2022, with the remainder expected to be incurred through 2024. The cash amount of these charges is expected to be $67 million to $77 million, including approximately $40 million in 2023, with substantially all expected to be incurred through 2024. The actual timing and costs of these actions may differ from the Company’s current expectations and estimates, and such differences may be material. These charges are subject to ongoing negotiations with the works councils, industrial associations and government authorities.
Additionally, on November 29, 2022, the European Commission issued a final decision imposing a fine to Trinseo in the amount of €32.6 million related to the commission’s 2018 investigation of styrene purchasing practices in Europe. This amount was in line with our previously recorded liability and was paid in full in December 2022.
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