LOS ANGELES, April 18, 2006 (PRIMEZONE) -- Occidental Chemical Corporation ("OxyChem"), a wholly-owned subsidiary of Occidental Petroleum Corporation (NYSE:OXY), today announced that it will convert its membrane cell chlor-alkali plant in Taft, Louisiana to produce potassium hydroxide (KOH). The company also announced it will close its Muscle Shoals, Alabama mercury cell chlor-alkali operation sometime in 2008 after this conversion is completed.
"OxyChem previously announced its intention to eliminate mercury cell production at Muscle Shoals," said Chuck Anderson, President of OxyChem. "We carefully studied the option of converting this plant from mercury cell to more modern technologies such as membrane. It was determined, however, that the economics do not justify the necessary capital investment for this relatively small chlor-alkali operation. Rapidly escalating rail transportation costs, rail service reliability and increasing environmental expenses related to mercury were also factors in this decision."
OxyChem remains committed to maintaining its leading position in the potassium hydroxide business. The conversion project at Taft is expected to allow OxyChem to supply KOH to all its customers without interruption and to help ensure the long term viability of this business. Plans are to continue to operate the Armand Products potassium carbonate joint venture at the Muscle Shoals site and the Mobile, Alabama membrane KOH plant for the foreseeable future. Upon completion of this project, OxyChem will no longer have any mercury cell chlor-alkali operations in the United States.
Muscle Shoals has a capacity of 154,000 tons annually of chlorine and 242,000 tons annually of potassium hydroxide. These basic chemicals are used to manufacture a wide range of products in the disinfection, soap and detergent, plastics, crop protection and pharmaceuticals industries.
The cessation of chlor-alkali production at Muscle Shoals will reduce OxyChem's annual chlor-alkali production capacity in the U.S. by 4 percent to 3.5 million tons and is not expected to impact OxyChem's ability to meet customers' requirements.
Statements in this release that contain words such as "will," "expect" or "estimate," or otherwise relate to the future, are forward-looking and involve risks and uncertainties that could significantly affect expected results. Factors that could cause results to differ materially include, but are not limited to: global commodity pricing fluctuations, changes in tax rates, supply/demand consideration for oil, gas and chemicals; higher-than-expected costs; and not successfully completing (or any material delay in) any expansion, capital expenditure, acquisition, or disposition. Occidental disclaims any obligation to update any forward-looking statements.