Celanese Initiates Shutdown of Ocotlán, Mexico Manufacturing Facility
Celanese Corporation (NYSE:CE), a global chemical and specialty materials company, today announces a further consolidation of its global acetate manufacturing operations by initiating the shutdown of its manufacturing facility in Ocotlán, Jalisco, Mexico.
The consolidation is designed to strengthen the company’s competitive position, reduce fixed costs and align future production capacities with anticipated industry demand.
Previously in June of 2018, Celanese announced it would discontinue the production of acetate tow at the Ocotlán facility. Today, Celanese is announcing that it will also discontinue the production of acetate flake at the Ocotlán site, essentially ceasing all manufacturing operations at the facility by October 31, 2019.
Marcel van Amerongen, Vice President of Celanese’s Acetate Tow business, stated:
“With China manufacturers completing plans for expanding acetate flake capacity in 2020, demands for imported flake will be reduced significantly. This, in combination with our ability to source additional volumes from our Narrows, Virginia facility, supports our decision to completely shut down our Ocotlán facility. This decision allows Celanese to further optimize cost and footprint as part of the long-term strategy for our acetate business to maintain its competitive position in the marketplace.”
The company will continue to serve its global acetate tow customers via its wholly owned facilities in Lanaken, Belgium, and Narrows, Virginia, USA, as well as through the company’s acetate tow joint venture partners in China.
Celanese has taken steps to strengthen its competitive position in the acetate tow market by lowering raw materials cost, reducing fixed costs and aligning with anticipated industry demand trends, such as optimizing production across all acetate tow manufacturing locations, as well as having made significant capital investments in the company’s manufacturing operations.
Van Amerongen concluded: “This was an extremely difficult decision given the impact to our employees and the local community, and we are dedicated to making this transition as smooth as possible. All impacted employees will be eligible for a comprehensive package of benefits which includes outplacement assistance, generous severance pay and other benefits intended to help individuals and families make a successful transition to the next phase of life. Today’s action is not a reflection of the quality of work performed by our employees at the Ocotlán site or the ongoing work performed by our employees in other acetate production sites, but instead the result of the critical evaluation of all strategic options to ensure the continued success of our acetate tow business.”