Dow to shut down Freeport TDI plant

MIDLAND, MICH. (Feb. 4, 3:15 p.m. ET) -- Dow Chemical Co. said Feb. 3 that it will permanently shut down its 100-kilotonne-per-year capacity toluene diisocyanate (TDI) production plant in Freeport, Texas, in the second quarter.

Midland-based Dow said the plant will close “because manufacturing TDI there is no longer economically viable.”

According to the company, “Dow Polyurethanes has secured an alternative supply source and will continue to provide consistency, quality, and supply reliability.” The company did not specify what this alternative TDI source is.

Dow’s nearest TDI plant to Freeport is a 60 kilotonne plant in Camaçari, Brazil. The company had said in mid-2008 that it was thinking of expanding that unit and would carry out a study to assess the potential.

Dow Polyurethanes said it will offer a “seamless transition” for North American customers.

“To remain competitive, businesses must continually optimize production units around the globe, and operate only those facilities that meet requirements for efficiency, overall cost-competitiveness and long-term sustainability,” the announcement continued.

Dow’s Freeport TDI plant was closed for nearly a month in October as a result of an equipment breakage, forcing the company to declare force majeure on supplies.

The Freeport facility has 54 employees. Dow Polyurethanes said it will work with Dow Texas Operations to minimize the impact of this decision on the workforce.

The major outlets for TDI are flexible foam for furniture and bedding, and demand in North America has been shrinking as a result of strong competition from China.

Other major suppliers of TDI in the United States are BASF Corp. and Bayer MaterialScience LLC.

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