Oklahoma City-LSB Industries Inc. said Sept. 9 that its anhydrous ammonia chemical plant in Cherokee, Ala., has experienced repeated plant downtime during the third quarter. The downtime, which was caused by the plant’s unexpected mechanical failure, has reduced production and sales of UAN, and to a lesser degree, certain industrial products. While interim repairs have been made as needed, more extensive repairs will be made during a planned maintenance event that is scheduled for approximately 21 days in October 2008. The plant is currently operating at slightly below normal rates; however, additional downtime could occur until repairs are made during the plant turnaround. Cherokee has lost approximately 20 days of operation thus far in the third quarter. Although LSB said it was unable to predict the actual impact of the unplanned downtime, it believes it could reduce LSB’s Chemical Business operating income by an approximate range of $5.0 to $6.0 million ($3.1 to $3.7 million after provision for taxes) during the third quarter of 2008. “The unplanned downtime at our Cherokee plant and the impact it will have on third quarter results are temporary setbacks,” said Jack Golsen, LSB’s chairman and CEO. “As soon as our October plant turnaround maintenance event is complete, we should be back on track. Market demand fundamentals for UAN are extremely favorable which we believe will continue for some time, and the business level of the Chemical Business as a whole continues to be strong. Our Climate Control Business continues to have a good year. We are very optimistic about the long term business prospects for LSB.”
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