Koppers close Clairton chemical plant; cuts 52 jobs

Koppers to close Clairton chemical plant; cuts 52 jobs

7:08 AM, 16th January 2016
Koppers to close Clairton chemical plant; cuts 52 jobs
Leroy Ball, president and CEO, Koppers Inc. (File photo)

PITTSBURGH, US: Koppers Inc, a wholly-owned subsidiary of Koppers Holdings Inc said that it plans to substantially discontinue activities at its tar plant located in Clairton, Pennsylvania.

The decision, which will affect 52 employees, was driven by the continued secular shift of primary aluminium production to lower-cost energy regions of the world, which has contributed to the overcapacity in the tar distillation industry. Recently announced closures and curtailments of significant capacity in the US aluminium market have only exacerbated the situation.

The company plans to ramp down production at the Clairton facility over the next six months as it transitions production to other Koppers-owned facilities in both the US and Europe and has targeted a date of mid-2016 for discontinuing activities at the Clairton plant.

The company expects this action to result in pre-tax charges to earnings of $17 to $23 million through the end of 2019, which includes $7 to $10 million of non-cash impairment charges that are expected to be recorded in the fourth quarter of 2015.

The pre-tax cost savings related to discontinuing activities are estimated to be approximately $4 million for the year ended December 2016 before reaching an annual run rate of approximately $14 million in 2017 and beyond.

“In addition to the $14 mn of expected annualized fixed cost avoidance benefits from closing Clairton, we also expect to realize increased profits on certain European products that can be diverted into the US market at a higher value. Those benefits, in combination with lower raw material costs, are expected to more than offset the profitability that will be lost due to the reduction in demand of carbon pitch from the US aluminium industry, which is expected to result in an approximate negative $40 mn top-line impact on our CMC segment in 2016,” said Leroy Ball, president and CEO, Koppers.

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