Westlake Corporation (NYSE:WLK) said it will close its polyvinyl chloride manufacturing facility in Cologne, Germany, citing weak demand, higher energy costs and increased import pressure from Asia affecting European chemical operations.
The Cologne facility, which has annual production capacity of approximately 165,000 metric tons of PVC, is expected to cease operations during the first quarter of 2027.
Westlake expects to record approximately $205 million in total pre-tax charges associated with the closure.
Westlake Expects $100 Million in Cash Charges
The anticipated charges include approximately $100 million of cash costs and $105 million of non-cash charges.
Around $110 million of the total is expected to be recognised in 2026, with the remaining charges expected in 2027.
Westlake said the Cologne facility has higher costs than its other European PVC operations because of its smaller scale and higher logistics expenses.
The company plans to continue supplying customers from its remaining PVC facilities in Germany, including its recently acquired Wilhelmshaven site.
“Given the persistent, challenging market conditions facing the global chemical industry, we have made the difficult decision to cease operations at our Cologne, Germany PVC site as part of our ongoing optimization of business operations,” President and Chief Executive Jean-Marc Gilson said.
North American PVC and Polyethylene Prices Decline
Westlake also provided an update on trading conditions in North America.
The company said average PVC and polyethylene prices were lower in the third quarter of 2026 compared with the second quarter, as price increases following the onset of the Iran conflict moderated.
Westlake also reported higher freight costs associated with rising diesel prices.
In its Housing & Infrastructure Products segment, the company recorded a moderate decline in sales volumes, which it attributed to a slowdown in housing activity.
Westlake Expects Lower Q3 Financial Performance
Against this backdrop, Westlake said it expects its financial performance in the third quarter of 2026 to be lower sequentially than in the second quarter.
The company did not provide specific third-quarter revenue or earnings figures in the supplied material.
Westlake is headquartered in Houston and operates across North America, Europe and Asia.