A half-century of low density polyethylene production will end by the end of March, when Dow Chemical Co. closes a 225 million-pound-per-year capacity plant in Freeport, Texas.
Midland, Mich.-based Dow also is ending polystyrene production at a plant in Pevely, Mo. No capacity number for that plant was available. Both closings are linked to the global economic slowdown and reduced demand for Dow's products.
The 50-year-old LDPE plant employs 40 and is part of Dow's massive petrochemicals complex in Freeport. The supply-demand outlook for LDPE in North America, the plant's age, cost position and older technology, and the need for additional investment do not make continued operation a viable option, global LDPE business director Pieter Platteeuw said in the release.
We are committed to the North American LDPE market and our customer base, he said. We will work closely with our customers to supply them from our other plants in North America.
Ending PS production in Pevely will eliminate about a dozen jobs, spokeswoman Rosemarie Rung said Feb. 12 by phone. Most of the PS made in Pevely was used internally, Rung added. Dow continues to make PS for internal use in Midland. The Pevely site will continue to make Dow's Styrofoam-brand foam, Rung said.
Dow announced Feb. 12 that it would reduce its quarterly dividend for the first time since payments began in 1912.
The first-quarter 2009 dividend will be 15 cents per share vs. 42 cents in fourth-quarter 2008. Officials cited uncertainty in the credit markets [and] unprecedented lower demand for chemical products.
U.S./Canadian LDPE sales were down 10 percent in the first 11 months of 2008, according to the American Chemistry Council.