Difficulties finding affordable feedstock are leading Dow Chemical to shut down 500 million pounds (227,000 tonnes) of annual polypropylene capacity at its St. Charles plant in Hahnville, Louisiana, US.
Other factors affecting the move include the plant’s use of older technology and the need for capital improvements at the site, global PP business director Julie McAlindon said in a news release.
Dow had sourced all of the propylene monomer feedstock used at the 30-year-old site from outside suppliers, spokesman David Winder said in a phone interview.
“We explored all options, but couldn’t find a way to source propylene in a cost-effective way,” he said.
Dow will attempt to supply PP customers from its remaining PP sites in Freeport and Seadrift, Texas, but Winder said the firm ultimately may lose some business.
“We’ll fulfill contract obligations, but we may not be able to maintain current levels of supply to all customers,” he explained.
The plant’s 60 employees are expected to be reassigned to other Dow businesses in Hahnville. Dow acquired the site when it purchased Union Carbide in 2001.
The move by Dow will leave the North American PP market with a net loss of 70 million pounds of capacity by the end of 2008. Basell is closing a pair of plants in Canada, but also is adding capacity in Texas and Mexico. Those moves were projecting a net gain of 430 million pounds of North American PP capacity before the Dow announcement.
About Dow
Dow is a diversified chemical company that harnesses the power of innovation, science and technology to constantly improve what is essential to human progress. The Company offers a broad range of products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. Built on a commitment to its principles of sustainability, Dow has annual sales of $49 billion and employs 43,000 people worldwide. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.
Dow people around the world develop solutions for society based on Dow’s inherent strength in science and technology. For over a decade, we have embraced and advocated Responsible Care® – a voluntary industry-wide commitment to safely handle our chemicals from inception in the laboratory to ultimate disposal. This worldwide commitment helps consumers lead better lives, customers succeed, stockholders prosper, employees achieve and communities thrive.
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