Dow to Achieve More Than $100 Million in Annual Savings via Additional Portfolio Management Actions to Streamline Manufacturing Footprint
Company Remains On Track to Reach $1.3 Billion in Cost Savings Related to Rohm and Haas Acquisition
The Dow Chemical Company announced today that on June 30, its Board of Directors approved a restructuring plan which calls for the shutdown of a number of manufacturing assets, including ethylene and ethylene-derivative assets in the Company's basics portfolio.
Consistent with the Company's $1.3 billion synergy commitment related to the acquisition of Rohm and Haas Company, the restructuring plan includes a charge for the elimination of approximately 2,500 positions, which has been previously announced.
Dow will also recognize an impairment charge due to an expected loss on the divestiture of certain acrylic monomer and specialty latex assets, which is required for United States Federal Trade Commission approval of the Rohm and Haas acquisition.
"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," said Andrew N. Liveris, Dow chairman and chief executive officer. "These actions are also aligned with our strategic transformation, which focuses on preferentially investing for growth in our performance and advanced materials portfolios. In addition, we are making excellent progress on achieving $1.3 billion in cost synergies from the acquisition, and today's steps demonstrate our speed and determination to deliver these savings."
Specific sites in the Company's Basics portfolio that will be impacted include:
Ethylene Production
Ethylene Derivatives
These shutdowns are in addition to numerous other ethylene-derivative closures that have occurred as part of a restructuring program announced in the fourth quarter of 2008, specifically:
(Dow Elastomers announced in December 2008 the closure of a large EPDM plant in Seadrift, Texas. )
These shutdowns, when taken in total, will reduce the Company's ethylene demand by approximately 30 percent on the U.S. Gulf Coast. As a result, Dow expects to eliminate its purchases of ethylene from the merchant market (approximately three billion pounds annually), improving the Company's cost position while fully integrating ethylene production with internal demand in order to better meet customer needs.
Platts 2009/7/1
Conversely the US VCM market is likely to tighten further and will likely push downstream PVC prices higher, sources said. The VCM market in the US remained tight prior to the Dow announcement on the back of a fire at Georgia Gulf's 727,000 mt/year VCM plant at Plaquemine and the idling of Oxy's 2.4 billion lbs/year VCM unit at LaPorte, Texas. Dow's shutdown at Plaquemine would only exacerbate the situation, sources said.June 16 2009
Fire at Georgia Gulf plant may further squeeze US VCM
A fire at a Georgia Gulf plant in Plaquemine, Louisiana, could further restrict US supplies of vinyl chloride monomer, buyers said on Tuesday.Georgia Gulf shut down VCM production at its Plaquemine site after a fire on Monday (6/15) morning, a source close to the company said.
The fire was extinguished after 20 minutes and did not affect ethylene dichloride (EDC), polyvinyl chloride (PVC) and chlor-alkali production at the site, according to the source.
VCM capacity at the facility is 725,000 tonnes/year, according to ICIS plants and projects.
July
8, 2009
Dow to Close its Ethylene Oxide & Glycol Plant in England
The Dow Chemical Company announced today that it intends to close
its ethylene oxide and glycol (EOEG) production facility at
Wilton, United Kingdom by the end of January 2010. The site
employs 55 people. The actual number of jobs that could be
impacted by the intended closure will be determined following an
employee consultation period.
Several factors contribute to the intention to close the Dow
Wilton EOEG plant, including the site’s disadvantaged input costs. In
addition, demand and profit margins for the site’s outputs, particularly
monoethylene glycol (MEG), began to soften in early 2008. MEG
economics have been significantly worsened by the global economic
recession, further placing the Wilton site at a disadvantage. The
ongoing recession is expected to prolong difficult global EOEG
industry conditions for several years and has expedited the need
for Dow to come to a decision regarding the Wilton facility.
The Ethylene Oxide / Ethylene Glycol (EO/EG) Plant at Wilton was built by ICI in
1969. It was
sold to Union Carbide Ltd in 1995 and became Dow's when the
companies merged in 2001.
Jul 8, 2009
Croda to shut Wilton manufacturing site
Britain's Crodais to close its Wilton manufacturing site in North East England following a decision by Dow Chemical to close an adjoining facility which produced a key raw material.
The manufacturer of ingredients for cosmetics and personal care products said on Wednesday it will enter into consultations over jobs with the site's 125 employees within the next two weeks.
It has taken the decision because Dow is the only UK manufacturer of Ethylene Oxide, a critical raw material, and it would be expensive for it to transport it from the continent.
Dow to Divest Ownership in OPTIMAL Group of Companies to PETRONAS for $660 Million
The Dow Chemical Company and Petroliam Nasional Berhad (PETRONAS) today announced that they have reached an agreement for Dow’s Union Carbide Corporation subsidiary to sell its entire shares of ownership in the OPTIMAL Group of Companies (OPTIMAL) to PETRONAS for $660 million. PETRONAS would fund this acquisition through internally generated funds. The transaction, subject to customary conditions and approvals, is expected to close by the end of the third quarter of 2009.
Dow and PETRONAS have agreed to enter into a commercial supply agreement allowing the two companies to continue serving the current customer base with products manufactured by OPTIMAL. Dow will market OPTIMAL’s basic and performance chemicals products to Dow’s existing customer base in Asia Pacific.
“OPTIMAL has been a great investment, thanks to the dedication and hard work of our joint venture employees and our partner PETRONAS,” said Andrew N. Liveris, Dow Chairman and Chief Executive Officer. “With this transaction, we hand over the management of these businesses to PETRONAS, while at the same time remaining committed to our customers in the region. This divestiture and commercial arrangement demonstrate Dow’s ability to increase its financial flexibility and to continue to de-leverage the balance sheet."
“Our purchase of Dow’s equity in OPTIMAL would enable us to strengthen our presence in Olefins and reinforce the growth of the Malaysian petrochemical industry,” said Mohd Hassan Marican, President and Chief Executive Officer of PETRONAS. “We have had an excellent working relationship with Dow over the years in OPTIMAL, and we expect that will continue, with Dow now becoming one of OPTIMAL’s largest customers.”
The change in ownership is not expected to have any immediate effect on employment in the region. OPTIMAL’s focus continues to be operating safely, responsibly and effectively while providing world-class products for customers throughout Asia.
Today’s announcement of Dow’s divestiture of OPTIMAL follows other actions designed to increase Dow’s financial flexibility, improve its cash flow, and pay down its bridge loan. Recent actions include:
As a result of these actions, the Company is ahead of all of its financial milestones, including the paydown of the bridge loan utilized to acquire Rohm and Haas.
About The OPTIMAL Group of Companies
Established in July 1998,
the OPTIMAL Group of Companies currently comprises three joint
ventures involving PETRONAS, Malaysia's national petroleum
corporation, and Union Carbide Corporation, a wholly owned
subsidiary of The Dow Chemical Company:
OPTIMAL Olefins (Malaysia) SDN. BHD. (PETRONAS: 64.25%, UCC:
23.75%, Sasol: 12%),
OPTIMAL Glycols (Malaysia) SDN. BHD. (PETRONAS: 50%, UCC: 50%)
and
OPTIMAL Chemicals (Malaysia) SDN. BHD. (PETRONAS: 50%, UCC: 50%).
Headquartered in Kuala Lumpur, OPTIMAL manufactures more than 70 products and serves key markets in the Asia-Pacific region from its world-scale petrochemical facility located in Kerteh, Terengganu, Malaysia. Products include ethylene and propylene feedstocks, Ethylene Oxide, Ethylene Glycol, Butanol, various Ethylene Oxide derivatives, basic chemicals and specialty chemicals.
About PETRONAS
PETRONAS was incorporated in 1974. It is wholly-owned by the Malaysian government and is vested with the entire ownership and control of the petroleum resources in Malaysia. Over the years, PETRONAS has grown to become a fully-integrated oil and gas corporation and is ranked among FORTUNE® Global 500's largest corporations in the world. For the fiscal year ending March 31, 2009, PETRONAS had a consolidated revenue of RM264.2 billion. PETRONAS has four subsidiaries listed on the Bursa Malaysia and has ventured globally into more than 30 countries worldwide in its aspiration to be a leading oil and gas multinational of choice. For more information, visit www.petronas.com.my
MEP, UNEP and Dow Join
Forces to Set Standards for Chemical Safety and Emergency
Preparedness in China
MEP, UNEP and Dow Launch Safer
Operation and Emergency Preparedness Pilot Project in
Zhangjiagang
A pilot project aimed at boosting operational safety and emergency preparedness among chemical companies in China was launched today at the Zhangjiagang Yangze River Chemical Park.張家港
It follows an agreement signed last September by China's Ministry of Environmental Protection (MEP), the United Nations Environment Programme (UNEP) and The Dow Chemical Company (Dow).
The pilot, in which Dow's Zhangjiagang facility has been selected as the primary demonstration site, was launched at a workshop involving close to 30 chemical and petrochemical companies alongside local and regional authorities and community bodies.
The pilot and workshop, jointly held by MEP, UNEP and Dow, is believed to be the first cooperative effort of its kind in China to explore and provide practical information on safer operation and the implementation of community-based emergency preparedness under the approach of UNEP's Awareness and Preparedness for Emergencies at Local Level (APELL) process.
"Dow is a proud partner in this standard setting collaboration with UNEP and MEP. This project will not only positively impact the sustainable development of China's chemical industry but also benefit the society as a whole," said Neil Hawkins, vice president for sustainability and EH&S at Dow. "Dow has always been committed to setting the standard for sustainability in locations where we operate, by engaging communities, establishing joint goals and taking action for the long-term success of all involved."
"This pilot project will draw together the global and local management expertise of UNEP and MEP as well as the operational excellence of industry leaders such as Dow, and will provide valuable information and experience for the future nation-wide promotion of safer production and emergency preparedness in China," said Arab Hoballah, Chief of the Sustainable Consumption and Production Branch of UNEP.
"UNEP remains committed to supporting the Chinese government and local communities to develop and implement policies and practices that preserve the environment and improve quality of life," he added.
"As our economy grows, it has become increasingly important to effectively utilize energy, reduce pollution, decrease the frequency of safety accidents, prevent the environmental emergencies and safeguards lives. Multi-sector cooperation such as this project plays a vital role in providing corporate and international best practices in our effort to support China's sustainable development," stated MEP.
The Zhangjiagang pilot is a crucial component of a two-year program initiated in 2008 between MEP, UNEP and Dow, to support the development of a safer production and chemical safety management system in China's chemical industry value-chain, and the awareness of emergency preparedness to enterprises, and the enhancement of management capacity emergency response, and relevant industrial environmental emergencies.
Companies participating in the pilot project should benefit from improved chemical safety: fewer accidents, safer production, fewer employees' injuries, fewer environmental emergencies and improved preparedness of the local community and of the local industry and its value-chain/buyers. Documents and experience generated from the project will be used in a case study for the further promotion of safer production and emergency preparedness promotion in China.
Building local capacity is a strong part of Dow's sustainability strategy in China. In 2005, Dow sponsored the three-year national pilot project with the China's State Environmental Protection Administration (now MEP). Dow also partnered with China's State Administration of Work Safety to launch a national demonstration project on the safe management of hazardous chemicals promoting a better understanding and awareness among small and medium-sized enterprises.
Dow Announces Shutdown of Styrene Monomer and Ethylbenzene Plants in Freeport, Texas
The Dow Chemical Company announced today that it will close styrene monomer and ethylbenzene production units at its Dow Texas Operations site in Freeport, Texas by the end of the year.
Dow would not confirm the capacity of the unit, but said industry reports had listed the unit with a capacity of 460,000 tonnes/year. Global business director Brian Ames said a smaller production unit at the same site was closed in the 2008 fourth quarter.
The closures are part of a broad restructuring plan the Company announced at the end of June 2009, which is designed to right-size Dow's manufacturing footprint and reduce exposure to its capital intensive Basics portfolio.
"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. "This decision also aligns with Dow's asset light strategy and improves our competitive position in North America."
Dow has secured a long-term contract for reliable styrene supply in the marketplace to meet the styrene demand of its derivative businesses.
Participants speculated that a supply contract, which Dow said it secured for the remainder of its styrenics businesses, was likely made with Lyondell and not joint venture Americas Styrenics. Dow would not divuldge the supplier.
A source said Americas Styrenics did not have sufficient capacity for a long-term supply contract.SM producers in the US include Americas Styrenics (Dow/Chevron Phillips Chemical), Cosmar (Total/Sabic), INEOS NOVA, LyondellBasell and Westlake
In the second quarter of 2009, Dow announced a restructuring plan which included actions to fully integrate ethylene production with internal demand - reducing the Company's ethylene demand on the U.S. Gulf Coast by approximately 30 percent. As a result, Dow expects to eliminate its purchase of ethylene from the merchant market (approximately three billion pounds annually) while improving the Company's cost position.
Dow remains committed to the North American market and to the Dow Texas Operations site in Freeport. Dow Texas Operations is the Company's largest integrated manufacturing site in the world, with approximately 70 production units on site.
・Freeport (Texas)：Styrofoam、latex、ABS の原料
PSはChevron Phillips Chemical との間で北南米のSM/PSの50/50JV Americas Styrenics
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July 01, 2009 ブログ
Dow to Achieve More Than $100 Million in Annual Savings via Additional Portfolio Management Actions to Streamline Manufacturing Footprint
Company Remains On Track to Reach $1.3 Billion in Cost Savings Related to Rohm and Haas Acquisition
The Dow Chemical Company announced today that on June 30, its Board of Directors approved a restructuring plan which calls for the shutdown of a number of manufacturing assets, including ethylene and ethylene-derivative assets in the Company's basics portfolio.
Consistent with the Company's $1.3 billion synergy commitment related to the acquisition of Rohm and Haas Company, the restructuring plan includes a charge for the elimination of approximately 2,500 positions, which has been previously announced.
Dow will also recognize an impairment charge due to an expected loss on the divestiture of certain acrylic monomer and specialty latex assets, which is required for United States Federal Trade Commission approval of the Rohm and Haas acquisition.
"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," said Andrew N. Liveris, Dow chairman and chief executive officer. "These actions are also aligned with our strategic transformation, which focuses on preferentially investing for growth in our performance and advanced materials portfolios. In addition, we are making excellent progress on achieving $1.3 billion in cost synergies from the acquisition, and today's steps demonstrate our speed and determination to deliver these savings."
Specific sites in the Company's Basics portfolio that will be impacted include:
Ethylene Production
Ethylene Derivatives
These shutdowns are in addition to numerous other ethylene-derivative closures that have occurred as part of a restructuring program announced in the fourth quarter of 2008, specifically:
These shutdowns, when taken in total, will reduce the Company's ethylene demand by approximately 30 percent on the U.S. Gulf Coast. As a result, Dow expects to eliminate its purchases of ethylene from the merchant market (approximately three billion pounds annually), improving the Company's cost position while fully integrating ethylene production with internal demand in order to better meet customer needs.
OMNOVA to Buy Hollow Sphere Plastic Pigment Product Line from Dow 中空球プラスチック顔料
OMNOVA Solutions Inc. and The Dow Chemical Company have signed an agreement for the sale of Dow's hollow sphere plastic pigment product line to OMNOVA.
The transaction is necessary to meet U.S. Federal Trade Commission (FTC) required divestitures related to Dow's acquisition of Rohm and Haas Company. The agreement comes ahead of the November 27 FTC deadline.
The selection of OMNOVA as the buyer must be approved by the FTC, and the acquisition is subject to normal closing conditions. The transaction is expected to close in the 4th quarter of 2009. Terms of the transaction are not being disclosed.
SCG-DOW Group
Commemorates Thailand HPPO Progress with Stone Laying Ceremony
PO
facility at Map Ta Phut on schedule to start up in 2011
The Dow Chemical Company (Dow) announced today that the SCG-DOW Group, a joint venture between Dow and The Siam Cement Group (SCG), and Solvay Peroxythai Ltd. recently commemorated significant milestones on the hydrogen peroxide to propylene oxide (HPPO) related investments with a foundation stone laying ceremony at the Asia Industrial Estate (AIE) site near Map Ta Phut, Thailand, where the HPPO facility is being built.
The SCG-DOW Group has procured all equipment and entered the initial construction phase on a world-scale propylene oxide (PO) plant, with an anticipated start-up in the first half of 2011. Once complete, the facility will manufacture PO via HPPO technology jointly developed by Dow and BASF, and will have a name plate capacity of 390 kilotons per annum (KTA).
The AIE site will also feature a specialty elastomers plant; a hydrogen peroxide plant built as a joint venture between Dow and Solvay; and power utilities and infrastructure. Nearby, a new liquids cracker, also jointly owned by SCG and Dow, will come on stream in 2010. The integrated Thailand plants represent a significant increase of the asset base for Dow in Thailand and Dow's largest manufacturing investments in Asia Pacific.