Canadian Plastics

Dow to close plants in Ontario, Alberta

The Dow Chemical Company has announced that its manufacturing operations in Sarnia, Ontario, and Fort Saskatchewan,...

August 31, 2006   Canadian Plastics

The Dow Chemical Company has announced that its manufacturing operations in Sarnia, Ontario, and Fort Saskatchewan, Alberta, will be shut down by the end of 2008.
The company also will not reopen a facility in Italy that had been closed temporarily.
In Sarnia, Dow’s low-density polyethylene (LDPE) production facility, which employs approximately 33 people, will shut down in September 2006, while a polystyrene (PS) production facility, which employs roughly the same number, will shut down at the end of the year.
“The closing of our LDPE facility in Sarnia was a difficult decision, but due to the suspension of ethylene shipments through the Cochin Pipeline and not being able to secure an alternate source of economically sustainable ethylene, it was unavoidable,” Glenn Wright, Dow global director for LDPE, said.
Ethylene shipments to Sarnia through the Cochin Pipeline were suspended for safety reasons in March 2006.
Closure of Dow’s PS facility in Sarnia will begin in fourth quarter 2006 and will be concluded by the year’s end.
“A number of factors, including the significant cost increase of doing business at Sarnia due to the closing of [Dow’s] LDPE facility, the need for capital improvements to the aging PS plant to maintain Dow standards, and the difficult long-term market conditions facing the PS industry made it necessary to shut down the Sarnia PS plant,” Jeff Denton, Dow product director for polystyrene in North America, said.
Also in Sarnia, latex production from Dow’s UCAR emulsion systems (UES) facility, as well as production from a polyols plant, will shut down by year-end 2008.
In Fort Saskatchewan, Dow will shut down its chlor-alkali and direct chlorination ethylene dichloride plant by the end of October 2006.
Finally, the company will also not restart production of toluene diisocyanate (TDI) at its facility in Porto Marghera, Italy, which had closed for planned maintenance in early August.
Dow expects these closings, which will affect a total of approximately 750 workers including those in Italy, to reduce structural costs by approximately $160 million per year.
Dow, which has annual sales of US$46 billion and employs 42,000 people worldwide, has shut down more than 50 manufacturing facilities worldwide in the past three years.
“We well recognize the impact of these decisions on our employees, their families, and those living in the communities around our sites; we will work hard to minimize the negative consequences of these necessary business decisions,” Andrew N. Liveris, Dow’s chairman and CEO, said.


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