DOW JONES NEWSWIRES
Dow Chemical Co. (DOW) will close three Louisiana plants that
produce ethylene and related products while cutting outside
purchases of the chemical amid lower internal demand due to last
year's restructuring plan.
The company's board approved the latest restructuring, which is
expected to produce $100 million a year in cost savings and is part
of the chemical giant's goal of cutting annual costs $1.3 billion
amid its $16.3 billion acquisition of Rohm & Haas in April.
"Today's steps demonstrate our speed and determination to
deliver these savings," said Chairman and Chief Executive Andrew N.
Liveris.
The latest closing are in addition to shutdowns announced last
year of four production units, located in Lousiana and Texas, which
use ethylene and related products. The moves cut Gulf Coast demand
30%. The company also expects to end purchases of about 3 billion
pound a year of ethylene from the merchant market.
The chemical sector was hit by a steep drop in demand late last
year that resulting in production cuts, plant closings layoffs and
even some bankruptcy filings.
Shares closed at $16.14 on Tuesday and didn't trade premarket.
The stock has lost nearly 60% of its value in the past 9 1/2
months, though its has nearly tripled since hitting a low of $5.89
in March.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com
