MRC -- Kem One, a significant player in the chemical industry, has made a strategic decision to temporarily suspend operations at its chlorine and caustic soda production facilities in France, said Chemanalyst.
This move is driven by the persistent issue of low profitability that the company has been grappling with. Kem One has announced that this shutdown is expected to endure for several months, reflecting the need to navigate through turbulent economic conditions.
The primary impetus behind this challenging decision stems from the continuous deterioration of market conditions within the processing sector. Kem One has observed a disconcerting absence of signs pointing to a swift recovery in demand, while the prevailing dynamics in the market are posing considerable challenges to the profit margins of European producers.
Over the preceding months, Kem One has witnessed a significant reduction in its production output, with figures showing that it has nearly halved. This substantial drop in production can be largely attributed to reduced demand for construction-related products and chemicals across the industry. To underscore the gravity of the situation, recent data from Eurochlor, an industry organization dedicated to chlorine production, reveals that capacity utilization for chlor-alkali products across Europe in the year 2023 is anticipated to reach historically low levels.
Kem One's presence in the French chemical industry is marked by two major production facilities. The first is located in Lavera, with an annual capacity of 341,382 tonnes of chlorine and 333,373 tonnes of caustic soda. The second is situated in Fos, boasting a capacity of 635,710 tonnes of chlorine and a substantial 2,202,200 tonnes of caustic soda per year.
Prior to this recent development, it was reported that Kem One, recognized as the third-largest producer of PVC (polyvinyl chloride) in Europe, faced an unscheduled shutdown of its caustic and chlorine production operations in St. Fons, France, in February. This unexpected disruption was triggered by a technical malfunction at the Kem One plant in Saint-Fons, which resulted in a production hiatus lasting for nine days.
The decisions taken by Kem One highlight the intricate and dynamic nature of the chemical and processing industry, where factors such as profitability and market conditions hold a pivotal role in shaping operational strategies. These actions undertaken by Kem One reflect the continuous challenges faced by the sector and underscore the company's commitment to adapting to the ever-evolving economic landscape.