Dow closing three upstream European assets amid “structural challenges” in region

Midland, Michigan – Dow Inc. has announced plans to shut down three European facilities by the end of 2027 in response to what it describes as “structural changes” in the region.

The move will see Dow “right-sizing upstream regional capacity, reducing merchant sale exposure, and removing higher-cost, energy-intensive assets,” the US-based supplier said 7 July.

The impacted units include the basic siloxanes plant in Barry, UK, which is part of Dow’s materials & coatings operations and is set for closure by mid-2026.

In the packaging & speciality plastics business, Dow will close its ethylene cracker in Boehlen, Germany by the fourth quarter of 2027.

The industrial intermediates & infrastructure unit will see the closure of chlor-alkali and vinyl (CAV) assets in Schkopau, Germany by the same timeframe.

As previously signalled in April (ERJ report), the closures are part of restructuring actions to “rationalise the company’s global asset footprint,” covering these European sites as well as certain corporate and other assets.

Dow announced its European asset review in October last year, with the focus initially on the polyurethanes segment but later extended to other businesses.

The company expects the three plant closures to deliver an operating earnings (EBITDA) "uplift" beginning in 2026, ramping to 50% of a $200 million (€170 million) target by the end of 2027.

Dow expects "full delivery" of the target by 2029, and a 'cash outlay' of $500 million over four years.

As a result of the actions, Dow will record charges ranging from $630 million to $790 million.

These include both non-cash items such as asset write-downs and write-offs, and cash items including exit and disposal costs, severance, and related employee benefit costs.

Shutdown activities are expected to begin in mid-2026 and be complete by the end of 2027, with potential decommissioning and demolition work continuing into 2029 as needed.

Dow said 800 jobs will be affected by the measures.

These will be in addition to the 1,500 roles globally targeted in the company's $1 billion cost-savings programme announced in January.

Dow said the shutdown of upstream assets in Europe will improve its ability to supply "profitable derivative demand and optimise margins.”

“Our industry in Europe continues to face difficult market dynamics, as well as an ongoing challenging cost and demand landscape,” said Jim Fitterling, Dow chair and CEO.

The European closures, Fitterlin noted, is part of Dow's strategy to take "proactive action" across higher-cost or non-strategic assets.