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CLAYTON, Mo., June 14, 2022 /PRNewswire/ -- Olin Corporation (NYSE: OLN) announced that half of its Plaquemine, Louisiana chlor alkali facility has returned to operation, which has been down since April 2022, with the remainder expected to return to operations in early August 2022. Olin's Freeport, Texas facility continues to operate at a reduced level of power generation with the expectation that a portion of the power generation will be restored in fourth quarter 2022. In May, Olin resumed integrated epoxy resin production at its Stade, Germany facility, which had been temporarily idled in March 2022.
During second quarter 2022, Olin has experienced weaker than anticipated epoxy resin demand in North America and South America. Olin is unwilling to sell incremental volume into a poor-quality market and operating the epoxy resin facilities at less than 50% operating rates is impractical. As a result of these factors, Olin Corporation announced that it is temporarily curtailing epoxy and related upstream inputs production at its Freeport, Texas and Guaruja, Brazil facilities.
Olin Corporation also announced that it is temporarily curtailing a significant portion of its ethylene dichloride and related chlor alkali production at its Freeport, Texas facility. As Olin's unique model adapts in real-time to globally prioritize system value; with the resumption of its Plaquemine, Louisiana operations; with high electrical power costs in Texas; and considering the poor-quality ethylene dichloride market conditions, Olin has decided to suspend this production.
Olin Corporation is a leading vertically-integrated global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition. The chemical products produced include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach, hydrogen, and hydrochloric acid. Winchester's principal manufacturing facilities produce and distribute sporting ammunition, law enforcement ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.
Visit www.olin.com for more information on Olin.
This communication includes forward-looking statements. These statements relate to analyses and other information that are based on management's beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projections about the markets and economy in which we and our various segments operate. The statements contained in this communication that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.
We have used the words "anticipate," "intend," "may," "expect," "believe," "should," "plan," "outlook," "project," "estimate," "forecast," "optimistic," "target," and variations of such words and similar expressions in this communication to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. The payment of cash dividends is subject to the discretion of our board of directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial conditions, our capital requirements and other factors deemed relevant by our board of directors. In the future, our board of directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.
The risks, uncertainties and assumptions involved in our forward-looking statements, many of which are discussed in more detail in our filings with the SEC, including without limitation the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2021, and our Quarterly Reports on Form 10-Q and other reports furnished or filed with the SEC, include, but are not limited to, the following:
Business, Industry and Operational Risks
sensitivity to economic, business and market conditions in the United States and overseas, including economic instability or a downturn in the sectors served by us;
declines in average selling prices for our products and the supply/demand balance for our products, including the impact of excess industry capacity or an imbalance in demand for our chlor alkali products;
unsuccessful execution of our strategic operating model, which prioritizes Electrochemical Unit (ECU) margins over sales volumes;
failure to control costs and inflation impacts or failure to achieve targeted cost reductions;
our reliance on a limited number of suppliers for specified feedstock and services and our reliance on third-party transportation;
higher-than-expected raw material, energy, transportation, and/or logistics costs;
the occurrence of unexpected manufacturing interruptions and outages, including those occurring as a result of labor disruptions, production hazards and weather-related events;
the failure or an interruption of our information technology systems;
failure to identify, attract, develop, retain and motivate qualified employees throughout the organization;
our inability to complete future acquisitions or successfully integrate them into our business;
our substantial amount of indebtedness and significant debt service obligations;
risks associated with our international sales and operations, including economic, political or regulatory changes;
the negative impact from the COVID-19 pandemic and the global response to the pandemic, including without limitation adverse impacts in complying with governmental mandates;
weak industry conditions affecting our ability to comply with the financial maintenance covenants in our senior credit facility;
adverse conditions in the credit and capital markets, limiting or preventing our ability to borrow or raise capital;
the effects of any declines in global equity markets on asset values and any declines in interest rates or other significant assumptions used to value the liabilities in, and funding of, our pension plans;
our long-range plan assumptions not being realized causing a non-cash impairment charge of long-lived assets;
Legal, Environmental and Regulatory Risks
changes in, or failure to comply with, legislation or government regulations or policies, including changes regarding our ability to manufacture or use certain products and changes within the international markets in which we operate;
new regulations or public policy changes regarding the transportation of hazardous chemicals and the security of chemical manufacturing facilities;
unexpected outcomes from legal or regulatory claims and proceedings;
costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings;
various risks associated with our Lake City U.S. Army Ammunition Plant contract and performance under other governmental contracts; and
failure to effectively manage environmental, social and governance (ESG) issues and related regulations, including climate change and sustainability.
All of our forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements.
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SOURCE Olin Corporation