Nova Chemicals Corp. on Tuesday said it will close its Nova Innovene Carrington, UK, solid polystyrene facility. Nova Innovene is the fifty-fifty European styrenic polymers joint venture between Nova Chemicals and INEOS.
The Carrington facility closure will remove aboiut six percent of European solid polystyrene capacity and reduce Nova Innovene's fixed costs by approximately $14 million per year. Production at the Carrington solid polystyrene facility, which has rated capacity of 396 million pounds annually, is scheduled to end in October.
Nova Chemicals will take a non-cash asset write-down of approximately $35 million after-tax in the third quarter of 2006 related to the closure. The joint venture will accrue an estimated $16 million in the third quarter for closure and severance costs, of which Nova Chemicals' share will be $8 million. In total, Nova Chemicals will record a charge of $43 million after-tax in the third quarter of 2006.