Other plants Dow in Canada and Italy are also hit by closures

Polyolefins major Dow Chemical has announced large-scale plant closures as part of measures to improve competitiveness of its global operations. The Sarnia plant in Ontario, Canada is the largest casualty, with all production set to finish by the end of 2008. The move follows an assessment triggered by the recent suspension of ethylene shipments through the Cochin Pipeline, which threw doubt on the long-term sustainability of the Sarnia-based businesses.

At Sarnia: the LDPE plant will be shut down over the coming weeks; polystyrene production will cease before the end of this year; latex production from the UES facility will shut down by year-end 2008; and the polyols plant will also shut down by year-end 2008. Also in Canada, chlor-alkali and direct chlorination ethylene dichloride plants at Dow’s Fort Saskatchewan facility will be shut down by the end of October. Dow said it could not justify new capital investment at the two plants.

In Porto Marghera, Italy, Dow has decided not to restart production of the toluene diisocyanate (TDI) facility, which was shut down for planned maintenance in early August. Fundamentals in the TDI business remain weak due to excess global production capacity, the company said. Dow’s third quarter results will include a charge in the range of $550m to $650m as a result of these shutdowns, and other optimisation activities.