Skip to main content
Sister Publication Links
  • Middle East Foam & Polyurethane
  • UTECH Asia/PU China
  • UTECH Europe
  • UTECH Las Americas
Subscribe
  • My Account
  • Login
  • Subscribe
  • Coronavirus
  • News
    • Asia
    • Americas
    • Europe
    • M & A
    • Financial results
    • Automotive
    • India levies anti-dumping duty on polyols from Saudi Arabia and UAE
      World car registrations rebounded in March
      Wanhua doubled revenue in Q1 2021
      Machinery sector business confidence returned to average in 2020
    • US mattress imports kept on falling in February
      World car registrations rebounded in March
      US footwear imports up in February 2021
      A fishy source of non-iso PUs
    • World car registrations rebounded in March
      Taking the helm at Baumer
      Western Europe's car registrations rebounded in March 2021
      Machinery sector business confidence returned to average in 2020
    • Recticel completes FoamPartner purchase
      iStock, 2019, 800, Web, glue, adhesive, sticky, CASE
      Plixxent moves into the UK
      Kingspan moves into pipe insulation
      Recticel insulation starts move into Central/Eastern Europe
    • Wanhua doubled revenue in Q1 2021
      Grammer felt the coronavirus fever in 2020
      Coronavirus drags down Anli’s 2020 earnings
      Sinomax grew business in 2020
    • World car registrations rebounded in March
      Western Europe's car registrations rebounded in March 2021
      US car sales up dramatically in March 2021
      Foam and chip shortage hit US car production
  • Data
  • Information
    • Country Overview
    • Market Sector overviews
    • Technical articles
    • Company profiles and strategies
    • China’s PU industry on the path to recovery; plans for technology upgrades
      Chinese cold chains grow bigger
      Flexible foam rises to challenges in the Middle East and Africa
      Life at the cross-roads: what does the GCC offer PU?
    • Europe's flexible foam makers face rising prices as outages hit markets
      Western European car registrations rebound slowed in September
      Western European car registrations regained some ground in August
      Western European Car registrations rebound continued in July
    • Take out the VOC with hybrid release agents
      Batteries give pultrusions power
      Seeing a way through VOC and FOG
      Aromatic polyols for simpler rigid PU formulations
    • Taking the helm at Baumer
      Hennecke and Frimo: an automotive partnership
      Pushing ahead: AutoRIM drives KM’s UK growth
      BASF opens it first ‘Creation Center’ in Mumbai with a PU twist
  • Events
    • Exhibitions
    • Conferences
    • Webinars / Livestreams
    • Become a Speaker
  • Advertise
  • Contact Us
  • Issues
  • Subscribe
MENU
Breadcrumb
  1. Home
  2. News
May 01, 2020 11:55 AM

Dow shrinks PU production as world gripped by coronavirus

Simon Robinson
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    Midland, Michigan – Dow is running its global polyurethane assets, including propylene oxide and MDI, at reduced rates in the coronavirus pandemic.  '[This is because of] government-mandated shutdowns around the world,' said Jim Fittering, the company's CEO.

    Fittering was speaking in a conference call with investors as the company reported financial results for the its first quarter of 2020.

    Fitterling: don't plough product into inventory

    He said polyurethanes are suffering because lockdowns had shut production in downstream industries such as automotive, furniture and bedding, appliances and construction. 

    He added: 'We are dialling back the capacity… we don't really feel like in this environment, ploughing a lot of material into inventory is the right thing to do.'

    Polyurethanes & construction chemicals –  part of the industrial and intermediates division – reported sales down in the first quarter of 2020. Prices fell because oil got cheaper over the quarter. Volumes fell everywhere but EMEAI, which was up slightly. Demand fell in furniture and bedding, automotive and appliance applications. Markets in the Asia Pacific region, particularly in China, had the biggest falls. 

    In the industrial intermediates & infrastructure business, net sales fell by 12.7% between Q1 2019 and Q1 2020, to $3bn. This compares with $3.5bn in the 2019 period. Operating EBIT in the division fell by 36.8% to $175m in the first quarter of 2020, down from $277m in the 2019 quarter.

    Fittering set the scene when he said: 'We… experienced margin compression in our upstream polyurethanes and silicones chains on weaker industry fundamentals.'

    Sales fell because prices and volumes fell in the quarter, but it was not all bad news. Volumes were up slightly in EMEA; however, everywhere else, coronavirus lockdowns stifled demand. 

    Taking the company as a whole, total net sales were $9.8 bn in the first quarter 2020, down 11.31% on the company's pro forma numbers for the same period last year.  Operating EBIT across the business fell by 26.2% in the quarter to $843 m.

    For the rest of 2020, Fittering said: '[Dow is] assuming a gradual and sustainable return of global economic activity and reopening of economies in May and June. We expect a recovery will begin to take hold as the year progresses.

    'We are further reducing our capital expenditure target to $1.25 bn. [This is down by] $750m on 2019; trimming operating expenses by $350 m; and unlocking another $500m from working capital.'

    However, Dow is still planning for new polyurethane businesses. Fittering said: 'Downstream, expansions in our industrial solutions are still continuing. Systems house[s] will come back as the automotive business and the insulation and construction business comes back.'

    Dow numbers Q1 2020 ( $ m)
    Group Q1 2020 Q1 2019 1 Change %
    Net sales 9770.0 11016.0 -11.31
    Operating EBIT 843.0 1143.0 -26.25
    Margin % 8.6 10.4
    Industrial Intermediates & Infrastructure
    Net sales 3045.0 3489.0 -12.73
    Operating EBIT 175.0 277.0 -36.82
    Margin % 5.7 7.9
    Source: Dow. Note 1: pro forma
    Recommended for You
    The raw materials roller coaster
    The raw materials roller coaster
    US mattress imports kept on falling in February
    US mattress imports kept on falling in February
    India levies anti-dumping duty on polyols from Saudi Arabia and UAE
    India levies anti-dumping duty on polyols from Saudi Arabia and UAE
    Latest Issue
    Click HERE for Free Download
    View All Archives
    Get our newsletters

    Breaking news and in-depth coverage of essential topics delivered straight to your inbox.

    Subscribe today

    Register to access our archive of leading information on the polyurethanes industry.

    Subscribe now
    Connect with Us
    • Twitter
    • LinkedIn
    • Facebook
    • Youtube

    Follow us on social media for the latest polyurethanes industry news and event updates.

    Logo
    Contact Us

    Office 127,
    61, Willow Walk,
    London
    SE1 5SF
    E-mail us
    +44 (0) 203 287 5979

    Customer Service:
    +1 313 446 0450

    Resources
    • Advertise with Us
    • Media Kit
    • Staff
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • Coronavirus
    • News
      • Asia
      • Americas
      • Europe
      • M & A
      • Financial results
      • Automotive
    • Data
    • Information
      • Country Overview
      • Market Sector overviews
      • Technical articles
      • Company profiles and strategies
    • Events
      • Exhibitions
      • Conferences
      • Webinars / Livestreams
      • Become a Speaker
    • Advertise
    • Contact Us
    • Issues
    • Subscribe