LSB Industries shuts Arkansas plant after explosion

Tue May 15, 2012 5:30pm EDT

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(Reuters) - LSB Industries Inc (LXU.N) said it will shut its biggest chemical manufacturing facility for an indefinite period after an explosion caused significant damage.

The company's shares, which fell as much as 23 percent, closed 7 percent down at $30.01 on Tuesday on the New York Stock Exchange.

LSB said the direct strong nitric acid (DSN) plant, which represents about 20 percent of its El Dorado, Arkansas facility's total capacity, was damaged when a reactor exploded in the morning.

There were no injuries related to the incident, the company said.

The explosion also caused minor damage to the three other acid plants at the facility, Chief Executive Jack Golsen said on a conference call with analysts.

LSB, which makes heating, ventilation and air conditioning (HVAC) and nitrogen-based chemical products, said it cannot estimate the extent of the damages.

Golsen said it remained unknown how long the El Dorado facility will be out of production as the control room had also been damaged.

The El Dorado plant produces and sells about 470,000 tons of nitrogen-based products per year, according to the company's annual report filed on February 28.

Privately held Orica International is among the facility's biggest customers. Orica accounted for about 11 percent of LSB's total revenue in 2011.

LSB's chemicals business, which makes up two-thirds of its revenue, competes with CF Industries Holdings Inc (CF.N), Agrium Inc (AGU.TO) and Potash Corp of Saskatchewan Inc (POT.TO).

LSB, which is investigating the cause of the explosion, said it believes there was no environmental release. (Reporting by Sagarika Jaisinghani in Bangalore; Editing by Sreejiraj Eluvangal, Maju Samuel)

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