03/04/2012

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Dow to close TDI plant in Camaçari, Brazil

According to Dow, the closure is part of a series of cost reductions in response to continued weakness in the European economy. The company's actions will include closing certain manufacturing plants in Europe, North America and Latin America, as well as cancelling a selection of capital projects and implementing workforce reductions, as part of its previously announced cost-reduction efforts and its "Efficiency for Growth” programme initiated in 2011. According to Dow, the decision to close the Camaçari facility was difficult, given the company's long-term participation in the polyurethanes industry and in the markets served by TDI product in Brazil and Latin America. As part of its EH&S goals, the company has been increasing standards for safe operations around the world and has made significant investments in the TDI Camaçari facility to increase plant safety. A recent mandatory risk assessment shows that the TDI Camaçari plant meets Brazilian legal requirements. However, significant additional investments would be required to operate the plant in accordance with Dow's increased EH&S standards. The plant has not been profitable in recent years and the required additional investments make the operation not economically viable. Finally, during the time required to implement further investments, the plant operation would remain at an undesirable elevated EH&S risk level. Therefore, Dow has decided not to restart the plant and to permanently shut it down. Since October 2011, the plant has been down for scheduled maintenance, during which time, Dow conducted a thorough review of all strategic options. "Dow is fully committed to working together with customers and other stakeholders on a transition which minimizes the impact of the decision and complies with contractual obligations,” said Fernando Rodriguez, general manager for Thermosets Latin America. The TDI Camaçari plant employs 123 people who have been notified of the decision. Dow will provide a number of redeployment opportunities at sites in Bahia as well as growth projects. Employees who are not redeployed will be supported by a comprehensive severance package. "Dow will strategically focus its polyurethane investments in Brazil on propylene oxide and derivative areas, such as polyether polyols and propylene glycol, and continue to run its polyol operation in Guarujá, Brazil, maintaining its position as the leading producer of polyether polyols in the world and the major producer in the South American region,” continued Rodriguez.

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