Dow shutters assets, sets multi-million-dollar charge

Dow Chemical will shut down a number of assets around the world to improve the competitiveness of its global operations. The actions will result in a $550 million to $650 million charge, which includes costs such as severance and asset write-downs, against third-quarter 2006 earnings. Dow expects the closings, when fully implemented, to reduce structural costs by about $160 million per year. The most significant shutdowns will be in Sarnia, Ontario; Fort Saskatchewan, Alberta; and Porto Marghera, Italy. At Sarnia, because of the shutdown of the Cochin pipeline, the low-density polyethylene plant will be closed in the coming weeks, polystyrene production will stop by the end of this year, and latex production from the UCAR Emulsion Systems facility will cease by the end of 2008. The polyols plant will also close by that date. In Fort Saskatchewan, Dow will close its chlor-alkali and direct chlorination ethylene dichloride plants by the end of October. And in Porto Marghera, Dow will not resume production at its toluene diisocyanate facility, which was shut down for planned maintenance in early August. Dow CEO Andrew N. Liveris says, during the past three years, the company has achieved significant reduction in structural costs by shutting down more than 50 manufacturing facilities.