24 October 2012 00:33 [Source: ICIS news]
HOUSTON (ICIS)--US-based Dow Chemical plans to eliminate about 2,400 positions and shut down about 20 plants, the company said on Tuesday.
The cuts should save the company about $500m/year (€385m/year) by the end of 2014, Dow said.
Dow expects to take charges of 50-60 cents/share in the fourth quarter for asset impairments and write-offs as well as severance and other costs, the company said.
In addition, Dow plans to save another $500m by reducing spending and investments for growth programmes, the company said.
The layoffs amount to 5% of the company's global workforce, Dow said.
Among the plant closings, the company plans to shut down a high density polyethylene (HDPE) plant in ?xml:namespace>
Dow will also close several plants in its performance materials segment. Those include an automotive systems diesel particulate filters plant in Midland, Michigan; an epoxy resins plant in Kina Ura, Japan; and formulated-systems plants in Ribaforada, Spain; Birch Vale, UK, and Solon, Ohio.
Dow will also take an impairment charge related to writing down its Dow Kokam assets, which reflects the weak global demand for lithium-ion batteries, the company said.
Dow will also consolidate some of the assets in its oxygenated solvents business and shut down a number of smaller plants.
Dow expects to shut down the plants and cut the jobs over the next two years.
“The reality is we are operating in a slow-growth environment in the near term and, while these actions are difficult, they demonstrate our resolve to tightly manage operations – particularly in Europe – and mitigate the impact of current market dynamics,” according to a statement by Andrew Liveris, Dow CEO.
"Importantly, we will continue funding projects where differentiation is rewarded even in this environment and where margin expansion opportunities are clear – for example in Dow AgroSciences, Dow Electronic Materials, and our Sadara and US Gulf coast investments," Liveris said. Taken on the whole, Dow’s strategy remains intact, and our long-term growth fundamentals are strong.”
Dow plans to announce its third-quarter earnings on Thursday before the market opens.
Earlier, US major DuPont also announced a restructuring plan that would cut 1,500 jobs in the next 12-18 months.
($1 = €0.77)
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