Dow eyes European plant sales

Faced with a weak competitive landscape in Europe that is unlikely to improve anytime soon, Dow is the latest company to put its European chemical assets under review.

Other large chemical firms are already downsizing in the region. LyondellBasell Industries is considering the sale or closure of some of its European polyolefin plants. ExxonMobil and Sabic have both announced plans to close ethylene crackers in Europe. And BASF has been downsizing at its flagship location in Germany.

Dow’s review, which the firm expects to complete next year, will focus on its polyurethane business, which makes raw materials such as methylene diphenyl diisocyanate (MDI), propylene oxide, and polyether polyols. The company says the assets under review have annual sales of roughly $2.9 billion, based on 2023 figures.

During a conference call with analysts to discuss third-quarter financial results, Dow CEO Jim Fitterling said the review will be “consistent with our best owner mindset,” a signal that the polyurethane facilities might be sold rather than shut down.

Fitterling said the assets are turning a profit and have a relatively good cost position in the region. “I don’t want to preclude anything, but I don’t believe shutting down MDI assets is going to be a value-creating opportunity,” he said. “But we’re going to look at everything.”

But the company has been trimming output in the polyurethanes business globally, including some polyol capacity and a propylene oxide unit in Freeport, Texas, that is due to be shut down next year.

Like many chemical executives, Fitterling has been exasperated by business conditions in Europe, where manufacturing costs are high and industrial policy, he said, has fallen behind that of the rest of the world. “This ongoing absence of clear, consistent, and competitive regulatory policy in Europe has resulted in many challenges for our industry,” he said.

Dow was the first large chemical maker to report third-quarter earnings, and its results were relatively flat. Sales rose by 1.4% versus the same period in 2023. Income declined by 3.2%.