The shutdown will cut 100 jobs and is directly related to the new strategy the company has adopted since it purchased specialty chemicals company Rohm & Haas in April.
Plant closures part of strategic move
Dow said that the closures will cost around $700m (€497m), but will allow it to save $100m a year over the longer term. The 100 employees displaced by these closures will be offered jobs elsewhere in the company.
The closures are part of a moves towards to the more lucractive specialty chemicals business.
Specifically, the sites affected by the shutdown are those which manufacture ethylene. Three sites in Louisiana, each producing this chemical will be closed.
Dow has been taking visible steps in the specialty chemicals direction since it took on a heavy debt to purchase Philadelphia based company, Rohm & Haas. These latest shutdowns of the basics plants are an affirmation of this shift in emphasis.
Andrew N Liveris, Dow Chairman and chief executive officer said “we continue to take quick and aggressive action to right-size our manufacturing footprint, particularly in our basics portfolio”.
He added, “These actions are also aligned with our strategic transformation, which focuses on preferentially investing growth in our performance and advanced materials portfolios.”
Recent times have seen one of the worst slumps in the chemical business in decades and Dow has been forced to sell assets. These shutdowns are in addition to numerous others, also related to the cut-back on ethylene production, in Texas and Louisiana in the first quarter of this year.