The other facilities earmarked for closure, a second in Hahnville and one in nearby Plaquemine, make ethylene derivatives for plastics manufacture, including for the production of pharmaceutical packaging.
Dow said that the closures will cost around $700m (€497m), but will allow it to save $100m a year over the longer term. It added that the 100 or so workers who staff the three plants will be offered jobs elsewhere in the company.
In a press statement CEO Andrew Liveris said that: “we [will] continue to take quick and aggressive action to right-size our manufacturing footprint, particularly in our basics portfolio.”
He added that the three closures are “aligned with [Dow’s] strategic transformation, which focuses on preferentially investing for growth in our performance and advanced materials portfolios.”
Plant closures and acquisitions
While Dow retains a strong presence in basic chemicals, the narrow margins and susceptibility to crude oil price fluctuations has seen the firm gradually build its capacity for the production of higher-value chemicals, including those used in the pharma industry.
Over the last six months for example, Dow has halted hydrocarbon rubber production at its unit in Seadrift, Texas, mothballed low-density polyethylene and styrene monomer plants in Freeport, also in Texas, and shut-down a chlorinated polyethylene unit in Plaquemine, Louisiana.
This restructuring process was further accelerated in April with the acquisition of US coatings group Rohm & Haas, which shifted Dow’s percentage revenue mix from 52:48 to 60:40 split in favour of specialty chemicals.