M&G Resins declares bankruptcy
M&G Resins has been on a bragging list of growing industrial development in the Coastal Bend for several years, but that could now be at an end. As its $1 billion plastics plant along the Joe Fulton International Trade Corridor in Corpus Christi nears completion, the company has found itself in financial trouble and is filing for bankruptcy protection. It has also put the plant up for sale.
Construction of the plant began in April 2013 and was supposed to be completed in December 2015. Now two years behind schedule, what was to the the world’s largest PET/PTA manufacturing plant is also more than $500 million over budget.
The first signs of trouble came in 2016 but peaked this fall when petrochemical company Alpek, based in Monterrey, Mexico, halted shipments of raw materials due to lack of payment. According to Alpek, M&G owes it $49 million.
M&G reportedly owes millions to at least 20 Texas companies. More than 40 liens have been filed against it, according to news reports.
After receiving $16.4 million in tax incentives to open the plant in the Coastal Bend, M&G’s financial troubles are claiming some local victims, aside from layoffs. Express Metal, a steel fabrication company in San Antonio, tripled its workforce to meet a $6 million contract it was awarded by M&G. Now, that company is in trouble due to slow and no payments from the international plastics group.
Operating under what the company has called “severe liquidity constraints,” M&G has been forced to stop construction, laying off 100 of its own employees. Contractor Fluor Enterprises has had to lay off 274 workers because of lack of payment for services.
M&G Resin’s plant, which is 85 percent complete, would be the largest of its kind to produce polyethylene terephthalate and purified terephthalic acid, the ingredients used to make plastic products.
Another ethlyene plant is planned for the Coastal Bend sometime in the next five years. Exxon Mobil has started the process for getting air quality permits necessary to begin construction on its proposed $1 billion steam cracker plant in Gregory-Portland.
M&G Resins is a privately owned Italian company. It has plants in Apple Grove, West Virginia, and Sharon Center, Ohio, as well as in other countries. The Apple Grove plant might soon be shutting down, however.
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