MMA, phenol, Argentine outages cost US Dow $350m in lost sales

03 August 2010 17:18  [Source: ICIS news]

HOUSTON (ICIS)--US major Dow Chemical lost about $350m (€266m) in potential second-quarter sales as a result of outages at its phenol and methyl methacrylate (MMA) plants in the US and its polyethylene (PE) plant in Argentina, the chief executive said on Tuesday.

The US outages lowered sales in coatings and infrastructure in particular, although other performance products were hurt as well, said Dow chief executive Andrew Liveris.

He made his comments during an earnings conference call.

"These are one-time events; they are over with; we fixed them," he said. "The plants are running safely."

The outage in Bahia Blanca, Argentina, hurt the company's Latin American results, he said.

Dow's PE plant in Argentina plant was down for a month because it could not get water, Liveris said.

Dow's phenol plant in Freeport, Texas, went down because of a problem with the heat exchanger, Liveris said.

"That affected the entire downstream coatings chain," Liveris said.

Liveris did not give a definite reason for the MMA outage at its site in Deer Park, Texas.

However, Liveris said the plant was the company's only petrochemical site that was once part of Rohm and Haas, which was acquired in 2009.

"Frankly, we've had to pour all of our people over to Deer Park to let it run to its potential," he said. "We've taken the opportunity to root cause investigate not only MMA but the entire acrylics production there so that they run to Dow standards."

Dow's MMA outage was among several disruptions for the material. Lucite, for example, had a planned turnaround at its MMA plant in Memphis, Tennessee.

The disruptions caused a shortage in acrylic paints, which represent about 80% of the paint used in US roads.

Dow also had an unusually high number of planned turnarounds during the quarter - about 120 out of Dow's estimated 600 plants, Liveris said.

"That's a big impact to any company going forward," Liveris said.

"The good news is that these outages and turnarounds are behind us, and we have returned to normal business," he said.

($1 = €0.76)

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By: Al Greenwood
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