Economy, costs to close chem plants - report

14 November 2008 16:19  [Source: ICIS news]

HOUSTON (ICIS news)--High costs will force the US and Europe to shut down older plants during the global economic slowdown, Blooomberg said on Friday, quoting US Dow Chemical CEO Andrew Liveris.

Dow could reduce capacity as well, Liveris said in the Bloomberg report. "There could be acceleration of capacity rationalisation because of acute pain," he was quoted as saying.

Already, Dow sales volumes have dropped 10-20% in the fourth quarter, and weaker sales should continue through the first half of 2009, Liveris said in the report.

Utilisation rates for the chemical industry could fall below 70%.

"To see a global contagion of this order of magnitude, I think that is what we are currently living and that is probably unprecedented," Liveris said.

The chemical industry may not recover until 2010 or 2011, Liveris said in the Bloomberg report. Until then, Dow is prepared to take "radical actions" in a bid to keep earnings within $2-3/share (€1.58-2.37/share), Bloomberg reported.

Dow Chemical was not immediately available to comment or elaborate on Liveris's comments to Bloomberg.

($1  = €0.79)

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By: Al Greenwood
+1 713 525 2653

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