Chemical production in Europe continues to face difficult conditions, including weak demand, elevated energy costs and increased import pressure from Asia. Due to its smaller scale and higher logistical burden, the Cologne plant has higher costs than the Company’s other European PVC sites. The Company will continue to serve its customers from its remaining, lower-cost PVC facilities in Germany, including its recently acquired Wilhelmshaven site.

The broader global market is also experiencing pricing and cost pressures. In the third quarter of 2026, PVC and polyethylene average prices in North America are lower than the second quarter of 2026 as the price increases initially realized in the second quarter following the onset of the Iran conflict have moderated. Furthermore, in its Housing & Infrastructure Products segment, the Company has experienced higher freight costs caused by a surge in diesel prices and a moderate decline in sales volume caused by the slowdown in housing activity resulting from a rising interest rate environment.

The Cologne facility has annual production capacity of approximately 165,000 metric tons of PVC per year. In connection with the Cologne closure, Westlake expects to record total pre-tax charges of approximately $205 million, consisting of cash charges of approximately $100 million and non-cash charges of approximately $105 million. Approximately $110 million of these cash and non-cash charges are expected to be recorded in 2026, with the remaining portion to be recorded in 2027. The site is expected to cease operations in the first quarter of 2027. These actions are expected to improve the ongoing profitability of Westlake’s European chlorovinyl operations.