Midland, Michigan - Dow Chemical Co. will close a polyurethane feedstock plant in Italy in a move the company hopes will improve profitability.
The Porto Marghera facility, which manufactures toluene diisocyanate (TDI), will not be reopened after being shut down temporarily for planned maintenance in Aug.
''Fundamentals in the TDI business remain weak due to excess global production capacity,'' the Michigan-based company said in a statement.
Dow also plans to close two plants in Canada, a polystyrene and low density polyethylene facility in Sarnia, Ontario, and a chlor-alkali and ethylene dichloride factory in Fort Saskatchewan, Alberta.
The company said the three closures would cost between $550 million and $650 million in the third quarter of 2006 but expected to yield annual cost savings of $160 million.
''One of the fundamental drivers of Dow's future success is the company's commitment to maintain a sharp focus on financial discipline and low cost to serve,'' Andrew Liveris, Dow chairman and chief executive, said.
''Part of that commitment involves continually looking for ways to enhance our efficiency and our cost-effectiveness - through good times as well as bad - to ensure we remain competitive across every business and in every geographic region.