Dow Chemical to slash production with plant closures by year-end
Dow's Texas plants scheduled to close down.
By David Hannon -- Purchasing, 10/15/2009 2:00:00 AM
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Dow chemical last month unveiled plans to scale back is production of styrene monomer and ethylbenzene by closing plants in Freeport, Texas this year.
The closures are part of Dow's broader strategy to reduce its demand for ethylene. As reported in July by Purchasing, Dow said it would 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., reducing its demand for ethylene by 30%.
Company officials say Dow buys more than 3 million lbs of ethylene a year.
"Closing these assets will help align Dow's styrene supply with U.S. demand and is another outcome of our plan to optimize our ethylene and styrene envelopes," said Brian Ames, global business director, Olefins, Aromatics and Aromatic Derivatives.
Dow also announced plans to sell its hollow sphere plastic pigment product line to Omnova Solutions.
The Omnova deal is the latest in a string of sales required by the FTC for Dow to make its purchase of Rohm & Haas. In July, Dow struck a deal with Petroliam Nasional Berhad (Petronas) under which Dow's Union Carbide Corporation subsidiary would sell its ownership stake in the Optimal Group of Companies to Petronas for $660 million. And in August, Dow agreed to sell an acrylic acid and esters plant as well as the North American unit of its UCAR Emulsion Systems specialty latex business to Arkema for $50 million.
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.
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