Dow Chemical Co. (DOW: Quote) said Monday that it will close certain manufacturing plants in Europe, North America as well as Latin America and cut about 900 jobs worldwide, citing continued weakness in the European economy. The maker of chemical products will also cancel certain capital projects.
Accordingly, Dow will take charges totaling about $350 million in the first quarter for asset impairments and write-offs, severance and other costs related to these measures.
Midland, Michigan-based Dow said it will shut down three plants that produce Styrofoam Brand Insulation products. The plants are located in Estarreja, Portugal; Balatonfuzfo, Hungary; and Charleston, Illinois. The company will also idle a plant in Terneuzen, The Netherlands.
In addition, Dow will close its toluene diisocyanate or TDI plant in Camaçari, Brazil, and consolidate certain other assets in its Polyurethanes and Epoxy businesses. These actions are expected to take place over the next two years.
The company noted that the restructuring will be part of its previously announced cost-reduction efforts and its "Efficiency for Growth" program initiated in 2011.
Dow expects annual savings of about $250 million from the restructuring actions. The savings are in addition to the $500 million in cash flow delivered by the company in 2011 from the inception of its "Efficiency for Growth" program. The savings are also part of the company's goal to deliver an additional $250 million of cash flow from cost interventions in 2012.
Andrew Liveris, Dow's chairman and chief executive officer said, "Today's announcement further demonstrates our resolve and ability to take swift, strategic cash flow interventions that will keep Dow solidly on a trajectory to deliver $10 billion in EBITDA in the near term."
In early February, Dow Chemical reported a loss for the fourth quarter of $20 million or $0.02 per share, compared to net income of $426 million or $0.37 per share in the year-ago period. Revenue for the quarter increased to $14.10 billion from $13.77 billion in the prior-year quarter, or $13.136 billion excluding divestitures.
In Monday's regular session, DOW is trading at $34.41, down $0.23 or 0.66 percent on a volume of 74,208 shares.
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by RTT Staff Writer
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