Here’s How LyondellBasell Industries is Improving Its Supply Chain with a New Facility and More
Just eight years ago, LyondellBasell Industries was at death’s door, having filed for bankruptcy in the wake of dropping demand for its products and a heavy debt burden. However, fast-forward to 2018, and the company has not only survived, but is thriving with a new plant, new acquisition, and an oxygen deal to go along with it.
Channelview, Texas
The one-time down-on-its-luck company has recently started work on a major project within an ambitious growth strategy which marks its comeback. In August 2018, LyondellBasell began construction on its most ambitious facility project to date – a $2.4 billion plant in Channelview, Texas.
The new facility, which is due to be completed by 2021, will be the largest of its kind in the world. It will be responsible for the production of propylene oxide and tertiary butyl alcohol, which are both used in the manufacture of polyurethane foam and high-octane gasoline. The Channelview plant will be the first new location built since the company restructured and implemented a plan to cut operating costs and expand existing facilities, at a time when most of its competitors were building new ones.
"Today's ground-breaking is a historic moment for our company," said Chief Executive Officer of LyondellBasell, Bob Patel. "This plant will be the largest of its kind, built to meet the rising global demand for urethanes used by billions of consumers each day and clean-burning oxyfuels that will help improve air quality around the world. The construction of this project will provide jobs for our neighbours, support local businesses, and strengthen our communities with increased tax revenues across the greater Houston region.”
The plant will be built on a foundation of Industry 4.0 technology. From Internet of Things (IoT) enabled connected machinery to the very latest in automated robotics and data analytics, the factory will have everything it needs to compete in the modern logistics environment.
A. Schulman
This new project follows hot on the heels of the company’s acquisition of Ohio-based plastics manufacturer, A. Schulman. The deal, worth $2.25 billion, will double the capacity of LyondellBasell’s plastics compounding ability. The process – which sees melted plastic blended with other additives – creates new substances which can be used in many consumer and industrial products, including automobiles, packaging, electronics and construction materials.
It all serves to help LyondellBasell create a smoother and more efficient supply chain, allowing the company to deliver its materials to both domestic and foreign markets, which can then be used to manufacture a vast range of products. The Channelview plant will also be responsible for producing emissions-reducing gasoline additives for shipping to Mexico, South America, and Asia.
“This combination with LyondellBasell and A. Schulman is all about bringing the best of both,” said Patel. “Combined, we’ll have a much broader market reach, one that’s able to bring better solutions faster. We’ll really be the only compounding company of this scale that has polyolefin technology, polyolefin production, compounding production and the innovation capability to meet the needs of our customers, and I think we’re in a unique position now to accelerate into our future.”
Air Liquide
LyondellBasell has also signed a deal with Air Liquide, which will enable it to source oxygen for the new facility from the Gulf Coast Pipeline System. The pipeline, the largest of its kind in the world, spans more than 2,000 miles along the coasts of southeast Texas and Louisiana. The new contract will enable the Channelview plant to more effectively meet the rising global demand for urethanes and cleaner-burning oxyfuels in the future.
“We appreciate the confidence LyondellBasell has placed in Air Liquide as the oxygen supplier of choice for their largest ever petrochemical plant,” said Chief Executive Officer of Air Liquide USA LLC, Susan Ellerbusch. “This long-term agreement further recognises the unmatched reliability and flexibility of Air Liquide’s Gulf Coast oxygen pipeline system and our ability to help LyondellBasell realise the fullest potential of their new world scale investment.”
Final Thoughts
From its new facility to new acquisitions and partnerships, LyondellBasell is making sure it can source everything it needs to continue its rise from the ashes and take its place among the world’s largest plastics, chemical, and refining companies.