Huntsman to Close German Maleic Anhydride Plant After Strategic Review

Huntsman Corp (HUN) will permanently close its Maleic Anhydride facility in Moers, Germany, by the end of the current quarter following a strategic review driven by an adjusted EBITDA loss of approximately $10 million in 2024; the company will serve European customers from its North American facilities. Huntsman anticipates a one-time, non-cash asset impairment charge of around $75 million in Q2 2025 related to the closure, while HUN shares have declined 54% in the past year amid weak order patterns in key markets.

Analysis

Huntsman Corporation's decision to permanently close its Maleic Anhydride facility in Moers, Germany, by the end of the current quarter stems from a strategic review highlighting the segment's underperformance, evidenced by an adjusted EBITDA loss of approximately $10 million in 2024 for its European Maleic Anhydride operations. This closure will result in a one-time, non-cash asset impairment charge of around $75 million in the second quarter of 2025. Huntsman plans to consolidate its European customer supply through its North American facilities in Pensacola, FL, and Geismar, LA. This restructuring occurs amidst significant challenges for the company; Huntsman's shares have declined 54% in the past year, substantially underperforming the Zacks Chemicals Diversified industry’s 27.8% decrease. The company has also reported weak order patterns in key markets such as construction and transportation due to low visibility and customer uncertainty, which are negatively impacting seasonal volume improvements. Reflecting these difficulties, Huntsman carries a Zacks Rank #5 (Strong Sell) and is actively pursuing cost actions, including workforce reductions and asset optimization across Europe and North America, to mitigate these headwinds.

Key Decisions for Investors

• Investors should recognize the German plant closure as a necessary step to address a loss-making unit, but remain cognizant of the $75 million impairment charge and the broader operational and market challenges Huntsman faces.
• Given the significant stock underperformance, the Zacks Rank #5 (Strong Sell) rating, and prevailing negative sentiment, investors should exercise caution, potentially re-evaluating existing holdings or deferring new investments in HUN until clear signs of fundamental improvement and market recovery are visible.
• Monitor upcoming earnings for the impact of cost-cutting initiatives, the successful transition of European supply from North American facilities, and any stabilization or improvement in demand from key end markets like construction and transportation.