Nylon maker Ascend files for bankruptcy

Struggling with debt and a market swamped with overcapacity, the nylon 6,6 producer Ascend Performance Materials has declared bankruptcy in Texas.

Ascend says that it is pursuing an easy restructuring process that will wrap up in about 6 months. It has secured $250 million in debtor-in-possession financing that will allow it to continue running its operations in the interim.

Headquartered in Houston and with its manufacturing primarily in the US, Ascend makes nylon 6,6 and its precursors, acrylonitrile, adiponitrile, adipic acid, and hexamethylenediamine (HMD). The company had sales of $2.4 billion in 2023.

The New York City–based private equity firm SK Capital bought the business, which had been losing money, from Solutia in 2009 for the bargain price of $50 million in cash. Under SK’s ownership, Ascend has expanded production, most notably building an HMD plant in China that it completed last year. Ascend bought a majority stake in the plastics recycler Circular Polymers in 2022.

Ascend blames the bankruptcy on its underlying financial structure and high debt obligations. "Over the last several months, we have been working with our lenders to define the best path forward,” Ascend CEO Phil McDivitt says in an announcement.

The firm took out a $1.1 billion loan in 2019, which the credit rating agency S&P Global Ratings said at the time was to refinance debt and fund a special dividend to shareholders.

This past February, S&P downgraded its rating for Ascend because of underperformance in 2024 and a “challenging operating environment.” Last year, Ascend closed its compounding plant in Tilburg, the Netherlands. Earlier this year, the company closed a facility in Greenwood, South Carolina, where it made nylon polymer and fiber.

“Globally, nylon 6,6 is experiencing oversupply across the entire value chain driven by overexpansion in mainland China,” says Meiko Woo, an executive director at the market research firm Chemical Market Analytics by OPIS.

“The US is the largest nylon 6,6 exporter, with the majority of volumes going to Asia and Europe,” Woo says. “The growing presence of mainland China in the rest of Asia is pressuring US nylon 6,6 production.”

Ascend’s chief US rival, Invista, put its nylon fiber business up for sale last year but decided earlier this month to keep it after engaging in a marketing process for the unit.

In addition, US exports to Europe have slowed because of a weakened economy there. European competitors to Ascend, such as BASF and Domo Chemicals, have also announced that they are closing nylon 6,6–related assets.

Nylon 6,6 producers in the US also face competition from lower-priced alternatives such as nylon 6, polyester, and imports of finished goods that contain nylon. “As a result, the nylon 6,6 industry in the US is grappling with subdued demand and compressed margins,” Woo says.