Dow plant closures hit Belgium and Japan
By Hamish Champ and Frank Esposito
Posted 5 November 2012
Plastics materials plants in Belgium and Japan are among the 20 plants that Dow Chemical will close worldwide, as part of a restructuring program that will eliminate 2,400 jobs.
Plastics operations set to be closed include a high density polyethylene facility in Tessenderlo, Belgium, and an epoxy resins facility in Kina Ura, Japan.
Pointing the finger at sluggish markets, particularly Europe, the US-based company said the restructuring program is “designed to accelerate cost-reduction actions and advance the next stage of the company’s transformation in the midst of persistently slow macroeconomic growth”.
The job losses amount to 5% of the company’s total workforce and the site closings are designed to cut annual operating costs by around $500m (£313m) by 2014, Dow said.
Dow added that it will cut capital spending and investment plans in non-core areas amounting to an additional $500m.
“The reality is we are operating in a slow-growth environment in the near-term and, while these actions are difficult, they demonstrate our resolve to tightly manage operations – particularly in Europe – and mitigate the impact of current market dynamics,” Andrew Liveris, Dow’s chairman and CEO, said in a 23 October statement.
Industry analyst Roger Young said the plastics plants being closed in Belgium and Japan are older plants. The Belgian plant also “wasn’t using key Dow technology”, he added.
Longer-term, Young said Dow “could be under some real pressure in Europe” since it uses feedstocks for ethylene-based products from naphtha, which is derived from crude oil. Plants in North America increasingly are using lower-priced ethane feedstocks from abundant natural gas supplies.
“As long as shale gas is around, Europe could be hurting,” he said.
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