Dow hurt by “demand destruction”
Material supplier Dow Chemical has announced a 97 per cent drop in first quarter 2009 profits as a result of ongoin...
Material supplier Dow Chemical has announced a 97 per cent drop in first quarter 2009 profits as a result of ongoing market weaknesses.
Dow reported earnings of just US$24 million, compared with US$941 million a year earlier.
“These results reflect the demand destruction that continued into the first quarter, balanced by strong results from Dow AgroSciences,” said Andrew Liveris, Dow’s chairman and CEO. “Inventory de-stocking appears to be over, so at least one major component of demand destruction is behind us. We are encouraged by the operating rate improvement that we have seen each month from December to April. Cost reduction actions we took also had a positive impact as we adapted quickly to the environment and they drove much of our sequential improvement in profitability.”
According to Dow, which has already announced the termination of 9,500 jobs and the closing of 20 plants, further cost-saving initiatives are planned. “We know that we have more work to do,” said Liveris.