LSB Industries, Inc. : Reports Progress on El Dorado, Arkansas and Pryor, Oklahoma Chemical Facilities
07/11/2012| 04:10pm US/Eastern
LSB Industries, Inc. (the "Company") (NYSE: LXU) released an update on
progress in certain areas of its chemical facilities located in El
Dorado, Arkansas ("El Dorado Facility") and Pryor, Oklahoma ("Pryor
El Dorado Facility
The Company announced on May 15, 2012 that the El Dorado Facility
suffered major damage to its DSN 98% concentrated nitric acid ("DSN")
plant and peripheral damage to other plants at that location. On June 5,
2012, the Company provided an assessment of the damages and its plan to
resume production at the El Dorado Facility. As planned, we restarted
regular nitric acid and ammonium nitrate production, on a partial basis
in June, and we are on track to increase that production during July and
August, as various plants are brought back on-line, as per our
originally announced timetable.
Following is a detailed update:
DSN concentrated nitric acid plant - We have determined that
repair of this plant is not feasible. The Company intends to replace
the nitric acid production capacity lost by this event with a new
nitric acid plant. Engineering is underway to determine the
specification for the new acid plant. Before the May 15th
event, the DSN concentrated nitric acid plant produced approximately
20% of the nitric acid manufactured at the El Dorado Facility.
Other "regular" nitric acid plants - The three other nitric
acid plants, which produce approximately 80% of the nitric acid at the
El Dorado Facility in concentrations from 56% to 63%, sustained less
damage and are being brought back on-line. The first of these three
nitric acid plants has returned to full production, and the other two
should restart later this month and August.
Ammonium Nitrate Prill plants - Both the high density and low
density ammonium nitrate prill plants are ready for full production as
acid production continues to be restored. These prill plants are
currently operating at less than full capacity due to limited
availability of feedstock.
Sulfuric acid plant - Production at this plant should resume
before year end. Before the May 15th event, sulfuric acid
was approximately 8% of the El Dorado Facility sales.
Transportation - All loading and unloading facilities are fully
Control systems - The temporary nitric acid control room is
operational and plans are being prepared for a new permanent control
General - Repairs to the permanent electrical service and
various support facilities are nearing completion.
Insurance - The Company is continuing to work with its
insurance carriers and is making good progress.
During March 2012 the urea plant was taken out of operation to repair a
break in the reactor's stainless steel liner. On April 25th
we determined that the break could not be repaired, so we decided to
replace the liner and announced that the urea plant would be down
through the second quarter.
The liner replacement is completed and UAN production has resumed.
During the time that the urea plant was down, we continued to produce
and sell ammonia and downstream products.
The main ammonia plant at the Pryor Facility has been recently producing
at approximately 75% of 2012 previous operating rates because of
problems with the ammonia converter. We plan to replace the converter
with an upgraded design during the first quarter of 2013.
Jack Golsen, LSB's Board Chairman and CEO stated, "We are making good
progress at our El Dorado Facility. Although the nitric acid capacity we
lost when the DSN plant was destroyed only accounted for about 20% of
our total nitric acid output from this facility, we intend to replace
that capacity as soon as feasible."
Turning to the Pryor Facility, Mr. Golsen stated, "Despite the fact that
our Pryor Facility has been extremely profitable, it has not yet
achieved its full potential. We have continually had problems sustaining
our targeted ammonia production rate from the main ammonia plant at
Pryor. We believe this is primarily due to the design of its ammonia
converter, which was part of the plant at the time we acquired it. We
have decided to replace that converter and expect that to occur during
the first quarter of 2013. We will continue to operate the plant during
the replacement process. That replacement should allow us to
de-bottleneck the production process and finally achieve our targeted
production capacity from this ammonia plant."
Mr. Golsen continued, "On May 5th we received permits to
operate the two smaller ammonia plants at Pryor. We are in the process
of commissioning those plants. We expect those plants to be in
production during the fourth quarter of this year, which should increase
Pryor's ammonia capacity by approximately 60,000 tons per year."
LSB Industries, Inc.
LSB is a manufacturing and marketing company. LSB's principal business
activities consist of the manufacture and sale of commercial and
residential climate control products, such as geothermal and water
source heat pumps, hydronic fan coils and modular geothermal chillers,
and large custom air handlers; and the manufacture and sale of chemical
products for the agricultural, mining, and industrial markets.
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Act of 1995. These
forward-looking statements generally are identifiable by use of the
words "believe," "expects," "intends," "anticipates," "plans to,"
"estimates," "projects" or similar expressions, and such forward-looking
statements include, but are not limited to, feasibility or timing of
repairs to or replacement of various parts of the El Dorado Facility and
timing of resumption of production. Investors are cautioned that such
forward-looking statements are not guarantees of future performance and
involve risk and uncertainties, and that actual results may differ
materially from the forward-looking statements as a result of various
factors, including, but not limited to, if for any reason insurance
coverage is denied or the insurance carrier refuses to pay a substantial
amount of our claim or claims, general economic conditions, inability to
repair or replace damaged equipment in a timely manner, inability to
fund the necessary repairs or replacements, changes in customer demands,
inability to obtain in a timely manner any necessary regulatory
approvals as to such repairs or replacements, and other factors set
forth under "Risk Factors" in Item 1A of Part 1 and under "A Special
Note Regarding Forward-Looking Statements" contained in the Form 10-K
for year ended December 31, 2011, and Form 10Q for the period ended
March 31, 2012 for discussions of a variety of factors which could cause
the future outcome to differ materially from the forward-looking
statements contained in this report.
LSB Industries, Inc.
Tony M. Shelby, (405) 235-4546
The Equity Group
Linda Latman, (212) 836-9609
Lena Cati, (212)
© Business Wire 2012