Dow Chemical (DOW) Sees More Than $100 Million in Annual Savings via Streamlining of Manufacturing Footprint
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The Dow Chemical Company (NYSE: DOW) announced today that on June 30, its Board of Directors approved a restructuring plan which calls for the shutdown of a number of manufacturing assets, including ethylene and ethylene-derivative assets in the Company's basics portfolio.
Consistent with the Company's $1.3 billion synergy commitment related to the acquisition of Rohm and Haas Company, the restructuring plan includes a charge for the elimination of approximately 2,500 positions, which has been previously announced.
Dow will also recognize an impairment charge due to an expected loss on the divestiture of certain acrylic monomer and specialty latex assets, which is required for United States Federal Trade Commission approval of the Rohm and Haas acquisition.
Specific sites in the Company's Basics portfolio that will be impacted include:
Ethylene Production: An ethylene cracker in Hahnville, Louisiana
Ethylene Derivatives: An ethylene oxide/ethylene glycol production unit in Hahnville, Louisiana; An ethylene dichloride and vinyl chloride monomer facility in Plaquemine, Louisiana
These shutdowns are in addition to numerous other ethylene-derivative closures that have occurred as part of a restructuring program announced in the fourth quarter of 2008, specifically:
A production unit in Seadrift, Texas, for the manufacture of NORDEL(TM) hydrocarbon rubber ceased production in the first quarter of 2009; A low density polyethylene unit in Freeport, Texas, ceased production in the first quarter of 2009; A production unit in Plaquemine, Louisiana, for the manufacture of TYRIN(TM) chlorinated polyethylene ceased production in the first quarter of 2009; and a Styrene monomer production unit in Freeport, Texas, ceased production in the fourth quarter of 2008
These shutdowns, when taken in total, will reduce the Company's ethylene demand by approximately 30 percent on the U.S. Gulf Coast. As a result, Dow expects to eliminate its purchases of ethylene from the merchant market (approximately three billion pounds annually), improving the Company's cost position while fully integrating ethylene production with internal demand in order to better meet customer needs.
The Dow Chemical Company (Dow) is a diversified chemical company. The Company is engaged in the manufacture and sale of chemicals, plastic materials, agricultural and other specialized products and services.[SM]
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