Why did lyondell go bankrupt

The privately held company, which operates a massive refining and processing plant in Houston, has suffered from plunging demand for chemicals as industries such as autos, housing and electronics weakened.

Tight credit markets have made renegotiating debt difficult. The company is not alone in its struggles. Related Coverage. They obviously would be a group of companies that we are watching. Expert insights, analysis and smart data help you cut through the noise to spot trends, risks and opportunities. Sign in. Accessibility help Skip to navigation Skip to content Skip to footer. Become an FT subscriber to read: Lyondell Basell files for bankruptcy Leverage our market expertise Expert insights, analysis and smart data help you cut through the noise to spot trends, risks and opportunities.

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For 4 weeks receive unlimited Premium digital access to the FT's trusted, award-winning business news. Digital Be informed with the essential news and opinion. The company has roots in two continents. Lyondell was spun out from the oil company Atlantic Richfield Co. The billionaire Len Blavatnik who still controls about 15 percent of the company acquired Basell in , before gobbling Lyondell in Patel, then an executive at Chevron Phillips Chemical Co.

He brought in Patel as a senior vice president in early , right before LyondellBasell emerged from bankruptcy. Patel took the reins in the beginning of when Gallogly retired. Gallogly and Patel faced tough choices as they worked to rebuild the company, closing about 10 plants and slashing almost 5, employee and contractor jobs, especially in Europe. With fewer global plants in operation and fewer people on the payroll, the company focused on making its remaining operations more efficient and profitable.

Unlike the merger, the timing of the reorganization could not have been better. The shale boom was kicking in, producing vast quantities of the natural gas liquid ethane, which is the feedstock for the primary building block of most plastics, ethylene.

The executives opted to expand their Texas plants to churn out more ethylene and completed those projects much faster than competitors, who were building facilities from scratch.