Sao Paulo, Brazil -- Dow Chemical Co. announced 2 April that it is closing its 60-kilotonnes-per-annum capacity plant to make TDI (toluene diisocyanate) at Camaçari in Bahia state, Brazil.
This closure is part of a series of cost reductions Dow is implementing in response "to continued weakness in the European economy," the company said.
Dow's Actions will include closing certain Dow plants in Europe, North America and Latin America, as well as cancelling a selection of capital projects and implementing workforce reductions, as part of previously announced cost-reduction efforts and Dow's 'efficiency for growth' programme, initiated in 2011.
Dow said the closure of the Brazil toluene diisocyanate (TDI) plant is the result of "extensive evaluation of the facility's long-term competitiveness and is aligned with Dow's environment, health and safety (EH&S) goals."
Dow commented that the decision to close this facility was difficult, given Dow's long-term participation in the polyurethanes industry and in the markets served by TDI product in Brazil and Latin America. In 2008, the company announced that it was examining the possibility of expanding the unit by 30ktpa.
Under its EH&S goals, Dow has been increasing standards for safe operations around the world, and said it has made significant investments in the TDI Camaçari facility to increase plant safety and a recent risk assessment showed that the plant meets Brazilian requirements.
But Dow said it would have to make "significant additional investments" to operate the plant to Dow's own raised EH&S standards.
Dow also commented that the plant has not been profitable in recent years and any additional investments would make the operation not economically viable.
Since October 2011, the plant has been down for scheduled maintenance, allowing Dow to review all strategic options.
"Dow is fully committed to working together with customers and other stakeholders on a transition which minimises the impact of the decision and complies with contractual obligations," said Fernando Rodriguez, general manager for Thermosets Latin America.
The TDI Camaçari plant employs 123 people, who have been notified of the decision. Dow said it will provide a number of redeployment opportunities at sites in Bahia as well as growth projects. Employees who are not redeployed will be supported by a comprehensive severance package.
Dow added that it is committed to serving customers as the leading global producer of propylene oxide, propylene glycol and polyether polyols with a more than 60-year legacy in polyurethane chemistry, backward integration to raw materials, innovation, as well as process and product stewardship expertise.
"Dow will strategically focus its polyurethane investments in Brazil on propylene oxide and derivative areas, such as polyether polyols and propylene glycol, and continue to run its polyol operation in Guarujá, Brazil, maintaining its position as the leading producer of polyether polyols in the world and the major producer in the South American region," commented Rodriguez
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