Dow to shut down 1.8bn lb/year of chlorine capacity in Freeport

02 December 2013 17:58  [Source: ICIS news]

NEW YORK (ICIS)--US-based Dow Chemical will shut down 1.8bn lb/year (816,000 tonne/year) of chlorine capacity at its Freeport site in Texas, starting in early 2014, its chief executive said on Monday.

The shutdown will be “coordinated with the start-up of [the Dow Mitsui chlorine joint venture] in early 2014”, said Andrew Liveris, chairman, president and CEO of Dow, on a conference call with investors.

“That is a very dated and aged facility that is at the end of its useful life. … It is 70 years old and has high maintenance costs,” he added.

Dow announced the carve-out of its chlorine and derivatives businesses earlier on Monday.

The businesses being carved out for divestiture – which could includes sales or partnerships – are US chlor-alkali, global chlorinated organics and global epoxy resins, along with associated brine and energy assets. Total sales of the businesses are around $5bn (€3.7bn).

Of the $5bn in revenue, about $4bn comprises merchant sales and $1bn for Dow’s internal downstream use, noted chief financial officer Bill Weideman, who was also on the call.

Dow’s 50% stake in the Dow Mitsui Chlor-Alkali (DMCA) joint venture in Freeport, Texas, US, will be included in the carve-out. That joint venture plant will include chlorine capacity of 800,000 tonnes/year.

Dow is the leading US chlorine producer with capacity of around 6bn lb/year, noted Liveris.

With the carve-out, Dow is “probably the largest customer [of chlorine production] but way less than 50%, mostly because of our polyurethanes”, said Liveris.

Dow has reduced its internal chlorine requirements by around 7bn lb/year since 2005, and has cut capacity in Fort Saskatchewan, Canada, in 2006 and Freeport in 2009 to align production with demand, he said.

($1 = €0.74)

By: Joseph Chang
+1 713 525 2653

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