UpdateDow to close four plants, cut 900 jobs amid weak Europe economy

02 April 2012 16:49  [Source: ICIS news]

Dow Chemical under pressureHOUSTON (ICIS)--Dow Chemical plans to close four plants in Europe and the Americas and idle another facility as part of a $250m (€188m)/year savings measure, the US-based chemical major said on Monday.

Dow Chemical said the move is primarily a response to “continued weakness in the European economy”.

The measure is expected to result in the elimination of about 900 jobs and will be implemented over two years.

Dow will shut down plants that produce STYROFOAM insulation products in Estarreja, Portugal; Balatonfuzfo, Hungary; and Charleston, Illinois, and it will idle a plant in Terneuzen,  Netherlands, it said.

Dow will also close its toluene diisocyanate (TDI) plant in Camaçari, Brazil.

In addition to the plant closures, Dow will consolidate certain other assets in its polyurethanes (PU) and epoxy businesses over the next two years, it said.

Dow also said it would cancel "a selection of capital projects".

Company spokeswoman Rebecca Bentley told ICIS these cancellations would primarily affect western Europe, where Dow sees "ongoing volatility and headwinds".

Bentley added that the cuts would not affect Dow's invesment plans on the US Gulf coast.

"We are very committed to the growth programmes we announced, our investments on the US Gulf coast, and we are moving forward full steam ahead," she said.

She added that Dow decided to permanently close the TDI plant in Brazil because that plant has a relatively high cost and low profitability.

The closure of the STYROFOAM plant in Illinois is related to weakness in the US construction market, she said. Dow Chemical would ramp production at a sister plant in New Jersey to cover the markets supplied by the Illinois plant, she said.

Dow will take charges of about $350m in the first quarter for asset impairments and write-offs, severance and other costs related to these measures.

Additional reporting by Bobbie Clark

($1 = €0.75)

By: Stefan Baumgarten
+1 713 525 2653

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