UpdateCorrected: Dow cuts plants, jobs in cost drive

04 December 2007 15:19  [Source: ICIS news]

Correction: In the ICIS news story headlined "Dow cuts plants, jobs in cost drive" dated 4 December 2007, please read in the sixth paragraph ...18 months... instead of ...28 months....A corrected story follows.

(Recasts, adds quotes and detail throughout)

By Nigel Davis

LONDON (ICIS news)--Dow Chemical will close plants across its businesses globally and cut up to 1,000 jobs to improve efficiency and cost effectiveness, it said on Tuesday.

The largest US chemicals maker said it expected to take a charge of between $500m (€340m) and $600m to include the costs of severances and asset write downs to help eventually realise cost savings of some $180m/year.

“We are committed to maximising value across every aspect of our operations – within both our businesses and our functions,” chief executive Andrew Liveris said in a press statement.

“Our focus on financial discipline and low cost to serve remains as sharp as ever,” he added. “Today’s announcement reflects our commitment to prune businesses that are not delivering appropriate value and tackle tasks more efficiently across the entire organisation,” he said

The restructuring measures apply across different businesses and geographic regions.

The most significant include the possible closure of an agrochemicals intermediates plant in Lautebourg, France, and the exit from the automotive sealants business in North America, Asia Pacific and Latin America within nine to 18 months. Dow is looking at its options for this business in Europe.

Dow said the Latuerbourg site suffered from a disadvantaged cost position in a business under increasing pressure from generic suppliers and overcapacity.

Its investment in the $500m turnover Quebec, Canada-based Petromont olefins and polyethylene joint venture will be written down and a styrene plant in Camaçari, Brazil idled.

Dow said it would also close its hydroxymethyl cellulose plant in Aratu, Brazil during the first quarter of 2008.

Union Carbide will shut its polypropylene (PP) plant in St Charles, Louisiana before the end of this year.

Dow said it would “significantly reduce” support functions including research and development at the Union carbide site in South Charleston, West Virginia, a move affecting 200 jobs. The move affects 150 research jobs at the site and is part of Dow's strategy to focus its R&D effort on nine global locations from the current 40.

Liveris said Dow would continue to look into ways to refine its organisational structure, asset base and business portfolio “to ensure Dow’s competitiveness on the world stage”.

($1 = €0.68)

By: Nigel Davis
+44 20 8652 3214

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