US Dow seeks to remain urethanes player after Texas TDI shutdown

02 March 2010 22:00  [Source: ICIS news]

HOUSTON (ICIS news)--Dow Chemical will remain a key global toluene diisocyanate (TDI) and polyurethanes products supplier even after the company permanently shuts its Freeport TDI unit in Texas in the second quarter, a Dow manager said on Tuesday.

To do that, Dow has entered into a long-term supply agreement with another major producer to cover customers’ TDI requirements, said Tom Feige, North American product manager for Dow’s polyurethanes business.

"The co-production agreement is not a joint venture, and will permit Dow to maintain pricing, quality and logistics independence," Feige said. "Co-production will allow Dow to maintain a competitive edge."

Dow did not disclose the identity of its co-producer, and it also did not discuss financial terms of the agreement.

Meanwhile, Dow also said it is assessing options for building new TDI capacity, and will initiate feasibility studies in the near future. The company will study alternatives that would allow it to become more competitive while protecting stockholders’ interests, Feige said.

Dow views itself as fully committed to the urethanes business in the long-term, and intends to remain a very active leader and participant in the capital-intensive industry, Feige added.

Dow announced it would permanently shut down its TDI production plant in Freeport in the second quarter of 2010 because manufacturing TDI there is no longer economically viable, the company said in a letter to customers in early February.

At the time, Dow said it would honour its contractual customer commitments for TDI. The company said it had secured an alternative supply source, and would continue to provide consistency, quality, and supply reliability.

For more on Dow Chemical visit ICIS company intelligence
For more on TDI visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Ron Coifman
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly