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Westlake Chemical

Westlake Chemical (NYSE: WLK) is a vertically integrated manufacturer and marketer of basic chemicals, vinyls, polymers and fabricated products.

Website: http://www.westlake.com/

Company Description

Westlake was founded in 1986 by Mr. T.T. Chao. His sons, James and Albert remain Chairman of the Board and CEO respectively.

Product Lines: Olefins: Ethylene, Polyethylene (LDPE and LLDPE), Styrene, Epolene, and Propylene

Vinyls: Caustic soda, vinyl chloride monomer (VCM), polyvinyl chloride (PVC) resin, and PVC building products including pipe, specialty components, windows and fence.

Olefins

The company 10K (2013) provides considerable detail. Ethylene is made in two plants by ethane cracking in Lake Charles, LA. (One of the two plants is equipped to use either ethane, ethane/propane blend, or propane/butane/naphtha.) Ethylene is also made by propane cracking in Calvert City, KY. That plant is being converted to ethane cracking to take advantage of abundant shale gas.

Coproducts include chemical grade propylene, crude butadiene, pyrolysis gasoline and hydrogen, which are sold to external customers.

Westlake is the largest US producer of LDPE (low-density polyethylene). In addition to natural gas liquids or petroleum feedstocks for ethylene, the company purchases butene, hexene (for polyethylene), and benzene (for conversion to styrene).

Competitors are listed as--

Chevron Phillips Chemical Co., Dow Chemical, Exxon Mobil Chemical Co., INEOS, LyondellBasell Industries, and Nova Chemicals

Vinyls

The company purchases electricity and operates chlor-alkali plants (electrolysis of salt to make chlorine and caustic soda) at both Calvert City, KY and Geismar, LA. Caustic soda is sold to external customers. The chlorine is reacted with ethylene to make ethylene dichloride (EDC), which is converted to vinyl chloride monomer (VCM) and then polyvinyl chloride (PVC) which in turn is converted to PVC pipe and building products like vinyl window frames. The company makes building products at 12 facilities. Westlake has the capacity to convert all of its PVC to building products but also sells PVC to downstream converters. The company has 59% interest in a jv with Suzhou Huasu Plastics Co. in China that makes PVC resin, building products, PVC film and sheets.

PVC competitors include--

Formosa Plastics, Axiall Corporation, Oxy Chem, LP, and Shintech, Inc.

Building Products competitors include--

Diamond Plastics Corporation and JM Eagle

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