Dow Chemicals recently announced plans to streamline operations and cut costs will include some restructuring early next year at its Dow Biocides and Angus Chemical business, along with slowing of production at some manufacturing facilities, company officials said.
Nanette Hermsen, global market manager for Dow Biocides, and Tina Frattaroli, global market manager for Angus Chemical Co., stated that at this time, both Dow businesses remain committed to the metalworking fluid market and their participation in the industry. Both businesses do have initial plans for some restructuring that will take place within the company during the first quarter of 2009, they told Lube Report.
Production has been slowed in several facilities to meet reduced demand forecasts in certain industries and geographies, they said. Industries such as the global automotive market and U.S. housing market have seen slowing, so this has reduced forecasts, Hermsen said. Geographically, the emerging markets have continued to show growth.
According to Frattaroli, the Angus manufacturing site in Sterlington, La., has been temporarily idled through the end of the year in response to reduced demand in the fourth quarter of 2008. Angus expects to resume operating in early January 2009, she added.
On Dec. 8 Dow outlined a series of actions to accelerate what it termed a transformational strategy in light of current economic realities. They include plans to eliminate approximately 5,000 full-time jobs, close 20 facilities in high-cost locations and divest several non-strategic businesses. Once fully implemented, the actions are expected to result in $700 million in annual operating cost savings by 2010 and are in addition to the previously announced cost synergies of $800 million in the same timeframe for the Rohm and Haas acquisition, which is expected to be completed in early 2009.
Reflecting poor current market conditions, Dow said it also plans to temporarily idle approximately 180 plants and significantly reduce its contractor workforce worldwide by approximately 6,000 as predicated by reduced operations.
The idled Sterlington plant is the flagship manufacturing facility for Angus, producing more than 40 specialty products going into a wide variety of industries ranging from metalworking fluids to paints and coatings, pharmaceuticals and personal care products. In 2005, Angus completed a multi-million dollar investment project at the Sterlington site. The capacity expansion projects enabled the company to increase volume for several products, including nitroparaffins and amino methyl propanols which are sold under the brand names 2NP and AMP-95, respectively. Both are used to provide corrosion protection and emulsion stability in metalworking fluids, among other applications, and the former is a key component in the production of the latter.
This past Fall Angus completed construction of a new $10 million research and development manufacturing plant in Sterlington to assist in scale-up and validation of next-generation nitroalkane-based products. Through the validation process, the company learns how products will work on a larger scale before making the decision to scale-up production.