LSB Industries Inc. expects more delays before it resumes operations at its main ammonia processing plant in Pryor, the company said Monday.
The Oklahoma City-based company was forced to shut down the Pryor plant in November for unplanned maintenance and to install new equipment.
LSB initially said the outage at would last six to eight weeks. The company has finished repairs at the plant, but the delivery of a key part of a compressor that LSB needs to finish upgrades at the plant has been delayed.
The delay will push back the reopening of the plant by about four weeks, the company said Monday.
The new compressor will help boost ammonia production at the plant once it is back up and running, said Tony Shelby, LSB’s chief financial officer.
“When we get this new converter, we expect to have some good, really long-term and sustained production,” Shelby said.
The plant employs about 130 people in Pryor.
The shut down is costing LSB about $2 million a week until production resumes, the company said.
Plant key to LSB’s profitability
Analyst Joe Mondillo of the equity research firm Sidoti & Co. LLC estimates that the Pryor plant accounted for more than half of the LSB’s profitability in 2012.
However, it’s good news that the plant will restart in the next few weeks, he said.
“There is a little bit of profitability lost in those two weeks, but it’s more of a definitive on when its going to be up and running again,” Mondillo said. “Overall, the announcement should be considered a positive one to the company and to the stock as well.”
LSB also said its damaged nitrogen plant in Cherokee, Ala., has been producing nitric acid and ammonium nitrate “at the targeted production level” using purchased ammonia feedstocks. An explosion ruptured a pipe at the Cherokee plant in November, causing a production slow down.
The company expects repairs to be completed and production to resume in the next three to five months at the Cherokee plant.