Dow Chemical to cut ethylene-related production in the U.S.
Closing three chemical plants will cut Dow's ethylene demand by 30%
Dave Hannon -- Purchasing, 7/1/2009 2:21:45 PM
Dow Chemical plans to shut three ethylene-related plants in Louisiana in an effort to reduce its cost structures and focus more on specialty chemicals production, a market it dove into with its acquisition of Rohm & Haas earlier this year.
Under the plan, Dow will permanently close an ethylene cracker in Hahnville, La., an ethylene oxide/ethylene glycol production unit in Hahnville, La., and an ethylene dichloride and vinyl chloride monomer facility in Plaquemine, La. By closing the plants, Dow will cut its demand for ethylene by 30%.
"Consistent with Dow's practice of active portfolio management, we continue to take quick and aggressive action to right-size our manufacturing footprint, particularly in our basics portfolio," says Dow CEO Andrew Liveris in a statement. "These actions are also aligned with our strategic transformation, which focuses on preferentially investing for growth in our performance and advanced materials portfolios."
In late 2008, Dow unveiled a restructuring plan to close or idle as many as 200 plants worldwide in an effort to move away from basic chemical production and focus more on higher margin specialty chemicals and leverage more manufacturing joint ventures. Then, this March, German chemicals giant BASF said it was taking an annual capacity of 220,000 metric tons of ethylene offline for at least three months, due to weak demand.
See also: Dow Rolls in Rohm & Haas
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