US chemicals firm Dow is undertaking a strategic review of its European polyurethanes assets, the company said today.
Dow will consider whether there are divestment opportunities. The assets under review are not loss-making and have "good cost positions in the European market", chief executive Jim Fitterling said during the firm's third-quarter results call. The review "really isn't driven primarily by shutdowns", he said.
Dow has a 635,000 t/yr chlorohydrin PO production plant in Stade, Germany, as well as related derivatives capacity at the site including 280,000 t/yr of propylene glycol production. The firm has 330,000 t/yr of HPPO capacity in Belgium as part of a join-venture with BASF and 684,000 t/yr of polyether polyols production capacity across three sites in Belgium, the Netherlands and Spain. It also has 380,000 t/yr of installed MDI production capacity across two sites in Germany and Portugal as part of its polyurethanes portfolio.
"I don't believe shutting down MDI assets is going to be a value-creating opportunity, but we're going to look at everything," Fitterling said.
The firm's chlor-alkali and vinyl (CaV) assets will be included in the review. "Chlorine-PO integration is critical for us," Fitterling said. "They are not [separable], we are not going to do anything without close contact with not only our own chlorine assets but also with our partners in Europe."
Dow has two chlorine assets in Europe including 1mn t/yr of diaphragm capacity and 600,000 t/yr of membrane capacity at Stade, as well as 250,000 t/yr of membrane capacity at Schkopau in Germany.
Fitterling did not discuss the firm's upstream assets but said the review in Europe "is around polyurethanes".
The assets under review account for around 20pc of Dow's sales in Europe, the Middle East and Africa. Dow expects to complete the review by mid-2025.
The firm pointed to "key competitiveness issues" and "the higher cost position" in Europe. It said it has concerns around the "need for clear and consistent long-term regulatory policies for our industry". In the current environment, demand recovery is "unlikely to be enough" to provide swift growth in Europe, it said.
LyondellBasell launched a similar strategic review of some European assets in May, although it has not yet announced any conclusions.
Sales down
Sales volumes in Dow's Industrial Intermediates & Infrastructure segment, which includes its polyurethanes business, fell by 2pc in the third quarter compared with a year earlier. This was driven by lower volumes in the Polyurethanes & Construction Chemicals business, "primarily from a force majeure in MDI following a third-party supplier outage", the company said.
Net sales revenue for the Industrial Intermediates & Infrastructure segment was $3bn in July-September, down by 2pc from a year earlier. Local prices were flat year on year, the firm said.
