Dow, three European plants shut down

Recently, the overseas chemical industry ushered in significant changes, a number of chemical leaders to open the "factory tide", the global chemical industry pattern in the cost pressure and competition restructuring is undergoing deep adjustment. BASF closed TDI and its precursor plant at Ludwigshafen base, Ineos phenol permanently stopped production at Gladbeck plant in Germany, and Covestro and Lian de Basser announced the permanent closure of propylene oxide/styrene monomer production plant at Maasvlakte plant in the Netherlands, with a cumulative shutdown capacity of hundreds of thousands of tons. Among them, a series of Dow's action is particularly eye-catching.

on July 7, Dow announced that the board of directors approved the closure of three European upstream assets to address structural challenges and optimize profitability. The specific shutdown plan is as follows:

packaging and Specialty Plastics: Ethylene Cracking Plant in Burren, Germany, expected to close in the fourth quarter of 2025.

INDUSTRIAL INTERMEDIATE AND INFRASTRUCTURE: Germany's Schkobo's chlor-alkali and vinyl (CAV) assets, expected to be closed in the fourth quarter of 2025.

Performance materials and coatings: Basic silicone plant in Barry, UK, expected to close in mid -2026.

The shutdown, which affects about 800 Dow jobs, is part of a $1 billion cost-saving initiative the company announced in January that also includes cutting about 1,500 jobs worldwide. Dow expects that the closure of these assets will boost operating EBITDA (earnings before interest, tax, depreciation and amortisation) from 2026, reach 50% of the target of about $0.2 billion by the end of 2027, be fully delivered in 2029, and have a four-year cash expenditure of about $0.5 billion. The decision to shut down the three factories is a continuation of more than 20 "asset actions" launched by Dow since 2023. Prior to this, the company had successively closed the polyether polyol factory in San Lorenzo, Argentina, the alkoxy chemical plant in Nangang Industrial Zone, Taiwan, China in 2024, and sold non-core assets such as flexible packaging adhesive business (sold to Arkema).

In addition to the closure of three European factories, Dow has a number of business adjustment initiatives this year:

u.S. Plant Capacity Adjustment: It is planned to close the propylene oxide (PO) plant in Freeport, Texas, USA in 2025. The plant has a capacity of 550000 tons/year, accounting for about 20% of the North American industry capacity, but the Plaquemine plant in Louisiana will continue to produce PO.

Project delays: The Fort Saskatchewan "Path2Zero" zero-carbon project in Canada, the world's first carbon-neutral ethylene cracking chemical plant, was postponed. The postponement is mainly in response to the current market conditions and the reduction of the 2025 capital expenditure plan, but the zero-emission chemical plant project in Alberta will continue to advance.

Stake Sale: Sale of 50% stake held in carbon fiber joint venture DowAksa. Founded in 2012 and headquartered in Yalova, Turkey, DowAksa is an industrial-grade carbon fiber manufacturer, mainly producing 3K, 12K, 24K large tow and small tow carbon fiber, covering raw silk, carbon fiber, resin, fabric and prepreg. After the sale, Dow is expected to earn 0.125 billion US dollars (about 0.9 billion yuan).

In terms of materials innovation, earlier this year, Dow and Technology Commercialization Platform Innventure announced plans to collaborate on the development and commercialization of new waste-to-value technologies aimed at achieving globally scalable, cost-effective conversion of mixed waste into petrochemical feedstocks.

at present, Dow's main three business units, covering ethylene and ethylene downstream, epoxy resin, polyurethane, acrylic and ester, silicone and other product chains. The first quarter of 2025 reported revenue of $10.431 billion, down 3.1 per cent from a year earlier, and net profit of $0.23 billion, down 65.9 per cent from $0.674 billion in the same period last year. According to US GAAP, Dow Chemical had a net loss of $0.29 billion in the first quarter of 2025, in sharp contrast to its $0.538 billion profit in the same period last year.

(I) Dow's short-and long-term initiatives

in 2025, Dow plans to reduce its carbon footprint through innovation and investment while growing its business. Although the construction of the "Path2Zero" zero carbon project has been delayed due to market conditions, the company remains committed to the long-term goal of the project. Recently, Dow has launched more than 40 breakthrough solutions in China, covering the fields of packaging, new energy vehicles and recycling, and has joined hands with partners to launch plastic recycling full life cycle traceability solutions. At the same time, Dow responds to macroeconomic challenges through cost optimization and financial support measures, plans to cut costs, reduce capital expenditures, and increase financial flexibility through divestiture and litigation benefits. As the Asia Pacific region is the core of the growth strategy, Dow will expand the supply chain capacity and strengthen cooperation to meet the needs of key industries.

(II) the Future of the Whole Chemical Market

accelerated capacity optimization and structural adjustment: affected by cost pressure, environmental protection requirements and intensified market competition, chemical enterprises will speed up the elimination of backward production capacity and optimize the layout of production capacity. In addition to the closure actions of Dow and other companies, other chemical companies may also shut down or transform high-cost and low-efficiency devices to improve industrial concentration and overall competitiveness. At the same time, enterprises will pay more attention to the coordinated development of the industrial chain, strengthen the cooperation between upstream and downstream, and realize the optimal allocation and efficient use of resources.

Green and low-carbon transformation has become an inevitable trend: with the increasing global attention to climate change, the chemical industry, as a major energy consumer and carbon emitter, is facing tremendous pressure to reduce emissions. In the future, chemical companies will increase investment in the research and development and application of green technologies, promote the green transformation of production processes, and reduce energy consumption and pollutant emissions. For example, the development of bio-based chemicals, carbon dioxide capture and utilization of new technologies, the development of degradable plastics and other environmentally friendly products to meet the market demand for green chemical products.

Digital transformation helps industrial upgrading: the application of digital technology in the chemical industry will become more and more extensive, from the automation control of the production process, supply chain management to marketing and other links, will use big data, artificial intelligence, Internet of things and other technologies to achieve intelligent upgrading. Through digital transformation, chemical companies can improve production efficiency, reduce costs, optimize product quality, and achieve rapid response to market demand. For example, the use of intelligent sensors and data analysis technology to achieve predictive maintenance of equipment, reduce downtime and maintenance costs; expand sales channels through digital marketing platform to improve customer satisfaction.

Emerging market demand as growth driver: With the development of the global economy and population growth, the demand for chemical products in emerging markets will continue to increase. Especially in Asia, Africa and Latin America, infrastructure construction, manufacturing development and consumption upgrading will drive the consumption growth of chemical products. Chemical companies will increase their efforts to explore emerging markets and establish localized production and sales networks to better meet local market needs and share the dividends brought about by the growth of emerging markets.

Industry integration and cooperation: In order to cope with the fierce market competition and complex external environment, the integration and cooperation between chemical companies will continue to strengthen. On the one hand, large enterprises will expand their scale through mergers and acquisitions, realize the integration of resources and complementary advantages, and improve the right to speak in the market; on the other hand, enterprises will strengthen cooperation in technology research and development, market development, supply chain management and other aspects to achieve mutual benefit and win-win results. For example, different companies can jointly carry out R & D projects to jointly overcome key technical problems in the industry; establish strategic alliances, share market information and resources, and jointly develop international markets.