Argentina's Rio Tercero shuts TDI plant on global oversupply

SAO PAULO (ICIS)–Petroquimica Rio Tercero has shut its toluene di-isocyanate (TDI) plant in Cordoba on the back of global oversupply, a spokesperson for the Argentinian producer confirmed to ICIS on Tuesday.

The plant had a production capacity of 28,000 tonnes/year of TDI, which is a key feedstock to produce polyurethane foam.

Production there stopped on 14 October. Rio Tercero said it would dismiss 1,250 employees.

“This decision [to shut the TDI plant] is mainly due to the transformation the sector has undergone worldwide, with the emergence of large-scale plants, especially in Asia, which are producing an oversupply of TDI which caused global prices to fall abruptly in recent years,” said the company.

“Another determining factor is the limited production capacity of our Rio Tercero plant, which makes it impossible to compete with larger global companies.”

The spokesperson said Rio Tercero would now “become a TDI trader” to ensure the continuity of the company, given that it will still need the product to produce polyaluminum chloride (PAC), an inorganic coagulant used in water purification.

The company’s PAC production capacity stands at 58,000 tonnes/year, according to the spokesperson.

As well as PAC, Rio Tercero also produces sodium hypochlorite, with a production capacity of 97,500 tonnes/year, and sodium hydroxide, with a production capacity of 11,000 tonnes/year.

All the remaining production plants are operating normally, the spokesperson said.

The company is a subsidiary of Buenos Aires-based Grupo Piero.

According to local media reports, the provincial government has contacted the union to express its support to the plant’s workers, but it remains unclear whether the government could make any significant intervention to avoid the closure.

EASIER TO SHUT PLANTS
Under the new Administration of Javier Milei which took office in December 2023, labor laws have been eased and firing employees has now become easier for companies.

Earlier in October, US chemicals major Dow also said it would stop producing polyether polyols at its site in San Lorenzo, in Argentina’s province of Santa Fe, on the back of poor economics.

The company had already tried to close that plant earlier, but pressure from the trade unions and tighter labor regulations at the time made the company backtrack in its plans.

According to the ICIS Supply & Demand Database (ISDD), with Rio Tercero’s TDI Plant now shut and Dow’s in the process of shutting its polyols facility, no company in Argentina will produce any isocyanates or polyether polyols.

Consequently, companies producing polyurethane (PU) will have to import all their inputs, among other examples.

Rigid PU foams are used mainly in insulation, refrigeration, packaging and construction, while flexible PU foams have applications such as upholstery, mattresses and seats. Polyols can also be used in elastomers, adhesives, coatings and fibers.

Front page picture: Petroquimica Rio Tercero’s facilities south of Cordoba city, Argentina
Source: Petroquimica Rio Tercero

Additional reporting by Al Greenwood