Now that Honeywell has spun off its Resins and Chemicals division into the standalone AdvanSix Inc, we finally have some corporate transparency about plant operations at Hopewell, VA.
In its first independent announcements over the last two weeks, notably including an operational update and its Q3 2016 earnings report, AdvanSix has provided lots of details of its financial and operational performance, and specified – for the first time – the plant’s ammonia capacity.
Also, we learned that the planned turnaround in the fourth quarter was extended by two weeks of unplanned maintenance, which will hit Q4 2016 earnings to the tune of $20-25 million.
The ammonia plant turnaround began on October 17 and was planned to last for 20 days, but is now expected to continue for an additional two weeks to address significant inspection findings regarding a code regulated pressure vessel …
“As a vertically integrated manufacturer of Nylon 6 resin, this extended turnaround will have an impact on all three of our major manufacturing sites during the fourth quarter,” said president and CEO Erin Kane …
“The planned fourth quarter 2016 turnaround scope was large – completing and commissioning nearly $90 million of capital projects that have been in progress over the last one to two years to replace and upgrade critical equipment, install NOx controls, reduce safety risks, and generally address mechanical integrity across all three sites,” continued Kane. The Hopewell projects, including a scheduled 18-month ammonia plant overhaul and a utility shutdown, coincided with a biennial turnaround at Chesterfield and an annual turnaround at Frankford.
The semi-annual Hopewell plant turnarounds incur additional maintenance and operations cost, supplemental raw material purchases as ammonia or oleum unit operations are interrupted, and fixed cost absorption due to low plant utilization. The median impact of individual planned outages since 2012 has been approximately $12 million. On average, these costs included approximately $5 million in maintenance and operations expense, up to $5 million in higher raw material purchase costs and a loss of twelve million pounds of caprolactam production. In comparison, the planned fourth quarter 2016 Hopewell turnaround impact is about 80% larger.
AdvanSix press release, 10/31/2016
AdvanSix has also recently launched a swishy new website at www.advan6.com.
However, I warn you to be very careful when visiting this website. Do not try to visit www.advansix.com because this takes you directly to a hard-core Hustler website, which is not work-friendly.
I don’t know to what extent Hustler is intentionally cybersquatting AdvanSix, or whether “advansix” is some legitimately exotic activity (something involving extrusion of nylons?). If you know and can explain in PG terms, please feel free to comment. In any case, AdvanSix’s legal team should clear this one up over the next few weeks.
In any case, you can learn more in my Research Note for Hopewell, VA.