Westlake is closing a production plant in Germany, putting about 120 people out of work, as the diversified industrial company grapples with challenging market conditions.

Westlake on Tuesday said it expects to record about $205 million in pretax charges related to the closure of the plant in Cologne, which has annual production capacity of about 165,000 metric tons of polyvinyl chloride, or PVC.

The Houston company said chemical production in Europe continues to face difficult conditions, including weak demand, elevated energy costs and increased import pressure from Asia, while the broader global market is also experiencing pricing and cost pressures.

Westlake said third-quarter PVC and polyethylene average prices in North America are lower than in the second quarter, while freight costs have rise due to a surge in diesel prices and a moderate decline in sales volume caused by a slowdown in housing activity.

As a result of the challenging market conditions, Westlake said it expects it third-quarter financial performance to decline sequentially from the second quarter.

The company said it will continue to serve customers from its lower-cost PVC plants in Germany, including its recently acquired Wilhelmshaven site.