April 02, 2012 - The Dow Chemical Company announced today that it is implementing cost reductions in line with its commitment to actively manage its portfolio and in response to continued weakness in the European economy. Actions will include closing certain manufacturing plants in Europe, North America and Latin America, as well as canceling a selection of capital projects and implementing workforce reductions, as part of the Company's previously announced cost-reduction efforts and its Efficiency for Growth program initiated in 2011.

Dow Brazil, a subsidiary of The Dow Chemical Company, will close its toluene diisocyanate (TDI) plant in Camaçari, state of Bahia, Brazil. This decision 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.

The decision to close this facility was a very difficult one, given Dow's long-term participation in the Polyurethanes industry and in the markets served by TDI product in Brazil and Latin America. As part of Dow's Environment, Health and Safety (EH&S) goals, the Company has been increasing standards for safe operations around the world. Dow has made significant investments in the TDI Camaçari facility to increase plant safety. A recent mandatory risk assessment shows that the TDI Camaçari plant meets Brazilian legal requirements. However, significant additional investments would be required to operate the plant in accordance with Dow's increased EH&S standards. The plant has not been profitable in recent years and the required additional investments make the operation not economically viable. Finally, during the time required to implement further investments, the plant operation would remain at an undesirable elevated EH&S risk level. Therefore, in line with our core values, Dow has decided not to restart the plant and to permanently shut it down.

Since October 2011, the plant has been down for scheduled maintenance, during which time, Dow conducted a thorough review of all strategic options. "Dow is fully committed to working together with customers and other stakeholders on a transition which minimizes 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 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 is committed to serving customers as the leading global producer of propylene oxide, propylene glycol and polyether polyols with a 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," continued Rodriguez.

Dow reiterates its long-term commitment to Brazil, serving distinctive markets through its 15 manufacturing facilities (large sites located in Aratu, State of Bahia, and Guarujá, State of São Paulo), five research centers (two of them launched in 2011) and two offices, in São Paulo and the recently opened office in Rio de Janeiro. In 2011 alone, Dow created more than 200 new jobs in Brazil increasing its workforce by 10%.

Also in 2011, Dow announced a joint venture agreement with Mitsui & Co. to build the world's largest integrated facility toward the production of biopolymers made from renewable sugar-cane derived ethanol. This would be Dow's largest investment in Brazil in more than 50 years of operation in the country. The project aligns with Dow's goal of developing low carbon solutions to meet the world's pressing energy and climate change challenges. Biopolymers produced at this facility will be a green alternative and drop-in replacement for the high-performance flexible packaging, hygiene and medical markets, offering customers the same performance attributes with a more sustainable environmental profile.

Dow is the world's largest producer of propylene oxide (PO), propylene glycol (PG), and polyether polyols, and is a leading producer of quality aromatic isocyanates, such as MDI. Dow's polyurethane products enhance a broad range of applications including construction, automotive, furniture, bedding, appliance, decorative molding, athletic equipment and more.

Source: Dow