Axiall expects housing to drive PVC sales growth

Spanish Market: Petrochemicals
12/11/14

Axiall sees near term improvement in the US housing market that will provide opportunities for PVC sales growth, Axiall chief executive Paul Carrico told investors today at the 5th Annual Global Metals, Mining and Materials Conference in New York.

"We believe the housing recovery will come at a level that continues to be higher than where we are today, albeit maybe a little slower than we would like or planned," Carrico said.

US sales of new single-family homes in September 2014 stood at a seasonally adjusted annual rate of 467,000, 17pc above year-ago levels and higher than at any point in the past six years, but significantly off the 1.38mn peak in July 2005.

Roughly half of sales in Axiall's building products segment comes from Canada, where the downturn in the housing market was not as significant as in the US.

"It is a good market, it is a stable market, versus what the US has experienced over the last five years and is one that we will continue to focus on," Carrico said.

A rebound in the US housing market provides opportunity for significant growth, he said.

"The comeback in the US will be much more dramatic than that in Canada," he said. "Growth clearly has been slower than what has been anticipated, but it seems like at least there is continuing momentum in the positive side."

At the same time, Axiall continues to consider integrating ethylene production into its chlorovinyls chain, given the surplus of raw materials in the US. The company will decide in the first quarter of 2015 whether to move forward with a proposed 1mn t/yr ethane cracker in Louisiana. The project, a 50:50 joint venture with South Korea's Lotte Chemical, would provide feedstock ethylene for Axiall's chlorovinyls segment.

"We are positioned, again, once we solve the ethylene piece of the equation, to be very formidable in our position in the market both domestically and globally," Carrico said.

mk/als

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Axiall expects housing to drive PVC sales growth

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