By Frank Esposito
SENIOR STAFF REPORTER
Published: October 29, 2014 3:58 pm ET
Updated: October 29, 2014 4:14 pm ET

Materials maker Ineos Group is closing its only global Barex-brand polyacrylonitrile (PAN) resin plant in Lima, Ohio.

Ineos – based in Rolle, Switzerland – is exiting the business as a result of the closing, which will take place in the first quarter of 2015.

“We regret having to take the decision to close our Barex plant and wind down the Barex business,” Ineos Barex president David Schmidt said in an Oct. 29 news release. “The business has been struggling financially for a number of years.”

“We have worked diligently to reduce costs and improve profitability, but have been unsuccessful in turning around the business,” he added. “We will work with our customers and employees to ensure an orderly closure of the Barex business over the coming months.”

A company spokesman said that as many as 50 jobs in Lima, Houston and Switzerland will be lost as a result of the move. Ineos plants in Lima making acrylonitrile and catalysts are not affected by the Barex move.

Barex is often used as a barrier layer in packaging applications. The material was commercialized in 1975 by oil and gas firm Sohio, which later sold the business to British Petroleum plc, which then sold it to Ineos.

At one point, PAN was seen as a competitor to PET in the bottle market, according to market analyst Peter Schmitt. Barex “is an excellent material for food, medical and pharmaceutical applications, though it has always been something of a specialty niche,” added Schmitt, who’s managing director of the Montesino Associates LLC consulting firm in Wilmington, Del.

Schmitt also said that he believes the plastics industry in general “will hope that a suitor can be found to buy (the Barex plant) and avoid shuttering it.”

“Perhaps a company other than Ineos is better equipped to work with a specialty product with small volumes,” he added. According to Schmitt, a major Barex application was packaging for Oscar Mayer-brand bologna made by Kraft Foods.

As recently as May 2013, Ineos was trying to grow the Barex business. That month, it acquired the PAN business of Tokyo-based Mitsui Chemicals Inc. for an undisclosed price. That deal did not include Mitsui’s PAN plant in Nagoya, Japan.