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Dow to idle Polyethylene resin plants in Americas
April 30, 2020

Materials giant Dow Inc. will idle five plants in the Americas for at least one month in response to the COVID-19 crisis.

Chairman and CEO Jim Fitterling said the idled plants include three polyethylene and two elastomer plants located on the U.S. Gulf Coast and in Argentina. Their total annual capacity is 2 billion pounds.

The locations of those plants were not included in a presentation released in advance of the Midland, Mich.-based firm's first-quarter earnings call on April 30.

Officials also said that Dow's polyurethanes unit would run at reduced global rates for MDI and propylene oxide until industrial demand improves. The firms silicones unit also would run at reduced siloxanes rates globally, while maintaining full flexibility in finished silicone applications.

All of these moves are being made to balance production with demand, officials said.

Overall, Dow will trim expenses by $350 million and reduce its capital expenditures target for 2020 from $2 billion to $1.25 billion.

First-quarter sales in Dow's Packaging and Specialty Plastics unit — including PE — were down 10 percent to $4.6 billion. Sales volume was flat, as growth in consumer-staple packaging applications was offset by lower ethylene sales. Taking out Hydrocarbons & Energy, Packaging and Specialty Plastics sales volume for the quarter was up 1 percent, as gains in Asia Pacific and Latin America more than offset declines in the U.S./Canada and Europe/Middle East/Africa.

I am proud of the Dow team's determination and resilience in the midst of the global pandemic and rapid decline in global energy prices, Fitterling said in a news release. We ensured the safety and security of our people and operations, maintained business continuity, and rapidly established an effective crisis management response.

He added that Dow showcased the necessity and value of our products as we met strong demand from our customers in food packaging, health and hygiene, and cleaning end-markets.

Our volumes and operating rates reflected divergent demand patterns, as we met increasing needs for consumer staple non-durable goods, which countered lower requirements for discretionary durable goods, Fitterling said. We partly offset the headwinds with stranded cost removal, effectively managing our working capital, and demonstrating our operational responsiveness and agility.

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