Feb 9 2009
Consistent with its strategy to focus on high-return, high-growth businesses that deliver consistent earnings, while withdrawing from non-strategic businesses, The Dow Chemical Company ("Dow") announced today its decision to stop the marketing and manufacture of UCAR™ Solution Vinyl Resin (SVR) products. These resins are sold into a broad array of applications, including rigid and flexible packaging, inks and coatings.
"We are proud of the success we’ve had serving SVR customers, but markets change and we must change and evolve with them," explained Hideyuki Ohnishi, a business director with Dow Epoxy, under which the SVR unit is managed.
"In recent years, we have experienced ever-weakening demand for SVR products," said Ohnishi. "As demand has fallen, costs have escalated and pushed our margins to unacceptable levels. With these conditions, and with the age and disadvantaged cost position of the one asset we have for the manufacture of these products, the business is no longer sustainable and is not the right place for Dow to allocate capital in the future."
Dow thoroughly reviewed all options to create value from the business. In the end, an exit was deemed the only viable choice.
The exit will lead to the closure of the SVR plant at Union Carbide’s Texas City site. If necessary, the plant will continue operating into the second half of this year so customers have reasonable opportunity to meet last-time volume requirements. While workforce reductions are expected at the Texas City site following the plant’s shutdown, the exact number of employees affected has not yet been determined. The site is currently evaluating its workforce needs for future business success and site competitiveness.