Pioneer Announces St. Gabriel Production Loss

HOUSTON, Sept. 27  /PRNewswire-FirstCall/ -- Pioneer Companies, Inc. (NASDAQ:PONR) announced today that an equipment failure at its St. Gabriel, Louisiana chlor-alkali manufacturing facility will delay the restarting of the facility beyond the resumption of customer operations, which were idled as a part of the area's preparation for Hurricane Rita.  The production capacity of the plant, which is operated by Pioneer's U.S. subsidiary, Pioneer Americas LLC, is approximately 540 ECUs per day.  Each ECU, or electrochemical unit, consists of 1.1 tons of caustic soda and 1 ton of chlorine.

While the cost to repair the plant's production line is estimated to be less than $500,000, the availability of necessary equipment and manpower to restore the plant to production has been limited by the scarcity of contractor resources due to the effects of Hurricanes Katrina and Rita.  Pioneer estimates that the St. Gabriel plant will be restored to production during the week of October 3.

"Many of our customers have been affected by operating disruptions caused by the two storms, and they understand the difficulty we face in coming back on line as quickly as we would like.  Our St. Gabriel personnel are engaged in an extraordinary effort to minimize the plant's downtime," said Michael Y. McGovern, Pioneer's President and Chief Executive Officer.  "Even with the St. Gabriel plant back up and running, Pioneer's operating margins will continue to be impacted by the effects of Katrina and Rita, since the cost of electricity, a key raw material for us, will be very high for the remainder of the year.  Transportation rates had been increasing prior to the storms, and further increases may be expected.  Our operations and costs will also be impacted by new distribution patterns necessitated by the disruptions to the rail transportation system."

Pioneer, based in Houston, manufactures chlorine, caustic soda, bleach, hydrochloric acid and related products used in a variety of applications, including water treatment, plastics, pulp and paper, detergents, agricultural chemicals, pharmaceuticals and medical disinfectants. Pioneer owns and operates four chlor-alkali plants and several downstream manufacturing facilities in North America. 

DATASOURCE: Pioneer Companies, Inc.



CONTACT:  Gary Pittman of Pioneer Companies, Inc., [phone]



Web site:  http://www.piona.com/ 

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