Difficulties finding affordable feedstock are leading Dow Chemical Co. to shut down 500 million pounds of annual polypropylene capacity at its St. Charles plant in Hahnville, La.
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 Nov. 6 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 telephone 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 said.
The company expects to reassign the plant's 60 employees to other Dow businesses in Hahnville. Dow acquired the site when it purchased Union Carbide Corp. in 2001.
The move by Midland-based Dow will leave the North American PP market with a net loss of 70 million pounds of capacity by the end of 2008. Basell Holdings BV of Hoofddorp, Netherlands, 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.