Dow Inc. used feedback from customers before deciding to idle five materials plants, and the global plastics giant will do the same when it decides to restart production there.
"Dow has a very solid strategy and a strong partnership with our customers," Diego Donoso, packaging and specialty plastics president, said in a May 18 interview with Plastics News. "We didn't want to deviate from that."
Polyethylene resin plants that were idled are in Freeport and Seadrift, Texas, and Bahia Blanca, Argentina. Dow also idled elastomers plants in Plaquemine, La. In total, the plants represent about 10 percent of Dow's global capacity for those materials.
Officials with Dow in Midland, Mich., said on April 30 that the plants would be closed for at least a month.
"We closely follow the value chain, but some things changed with COVID-19," Donoso said. "In the beginning, there was a lot of demand from supermarkets because people were buying more than they needed.
"Going into the second quarter, we asked our customers for more visibility and for them to commit early so that we can work with supply chain issues," he added. "That gave us enough time to create visibility on how much capacity we wanted to have.
"If we had spare capacity, it wasn't worth putting it out there without a formal destination. Based on that, we made the made decision to idle some capacity."
Dow can restart the plants when it needs to, but Donoso said that, for now, "it's better to let the market calm down and work on what we know."
The idled PE plants "can be ready to go if June is better," he added. The elastomer plants are likely to be closed for 30 days or more because of the condition of the automotive market, Donoso said.
"We expect to have a good second quarter, but discipline is still the name of the game," he said. "In Asia and Europe, we have tremendous visibility. We want more [visibility] in North and Latin America."
There are "some good signs" coming out from some markets, according to Donoso, who joined Dow in 1991 and has held his current title since 2012. "Europe is ready for some recovery, and the rest of the world is starting to open up," he said. "Demand is becoming more normal."
Exports of PE from North America have remained strong during the COVID-19 crisis. The export market is important to Dow and other North American PE makers as a destination for a good portion of the new capacity they've added in recent years to take advantage of affordable shale gas in the region.
Lower oil prices have reduced some of the advantage seen by natural gas feedstocks, but Donoso said that market shift hasn't affected PE export sales volume.
"All the [PE] material that needed to be exported has been exported," he added. "There was some concern about availability of vessels at first, but now shipping companies are contacting us because we have product available."
Dow's work on sustainability is ongoing during the COVID-19 crisis, Donoso said.
"Sustainability will still be our focus," he added. "The work that we've set in motion will continue."
Dow also has been active with numerous COVID-19 relief efforts. Officials said May 18 that Dow is working with several other firms, including DuPont Co., 3M, Magna International Inc. and Volkswagen, to donate 100,000 isolation gowns to healthcare professionals.
The gowns will be distributed in Texas, Louisiana and Mexico. In a news release, Health and Hygiene Global Marketing Director Michelle Boven said that the donation effort shows "how quickly companies can innovate when a diverse team from different organizations across industries come together to achieve a common objective."
The gown is made with a nonwoven PE coated with a layer of PE film made with resin donated by Dow. Each company involved in the effort contributed to the product in some way.
On May 14, Dow, Whirlpool Corp. and Reynolds Consumer Products announced the development of a powered, air-purifying respirator, which takes the place of a traditional medical face mask and face shield.
Whirlpool designed, manufactured and assembled the respirator's headset. Dow provided the PE resin for its hoods, and Reynolds designed and produced a disposable hood. Volkswagen also brokered connections with materials and supply chain partners to source critical components.
In a news release, Dow Chairman and CEO Jim Fitterling said that the collaboration "is a testament to the private sector's continued commitment and quick actions to work across industries to innovate health care solutions at a time of unprecedented need."
Dow is one of the world's largest producers of PE and specialty plastics. The firm employs more than 36,000 worldwide and posted sales of approximately $43 billion in 2019.