Dow reports demand growth for downstream silicones amid plant closures

Midland, Michigan – Dow Inc. has reported continued volume growth in its downstream silicones business despite weaker overall sales within its Performance Materials & Coatings segment.

In its fourth quarter earnings call 29 Jan, Dow noted that the increase marked the second consecutive year of growth for its downstream silicones franchise.

The US group reiterated its strategy of “shifting our mix towards higher-value products while reducing upstream capacity.”

As part of this, Dow said it was moving ahead with the closure of “higher cost upstream assets” in Europe, including a basics siloxanes plant in Barry, UK, by mid-2026.

“Each of these assets represent a meaningful portion of our regional capacity and are high on our cost curve,” said chief operating officer Karen Carter.

The shutdowns, she said, are expected to be cash accretive and deliver an annual earnings (EBITDA) uplift of $200 million (€170 million) by 2029, with benefits beginning in 2026 following the closure of the Barry facility.

In the fourth quarter, Performance Materials & Coatings posted net sales of $1.9 billion, down 6% year-on-year.

The decline was linked primarily to a 4% reduction in local prices across Dow’s two businesses of Consumer Solutions, which includes its silicones activities, and Coatings & Performance Monomers.

Sequentially, sales also declined, reflecting seasonal weakness, particularly in building and construction end markets.

Volumes fell 2% year-on-year, driven by lower supply availability linked to planned maintenance in coatings and performance monomers, while volumes in Consumer Solutions were flat.

Despite lower sales, operating EBIT for the segment rose by $34 million compared with the previous year, driven by strong demand in electronics and mobility applications and ongoing cost reduction efforts.

Sequentially, however, operating EBIT declined by $55 million, largely due to reduced monomer supply from a planned turnaround at Deer Park, Texas, and typical seasonal demand softness.

In its latest annual filing, Dow said it will continue to prioritise performance silicones end-markets, which it said can drive value and volume growth through "innovation and footprint."

The company expects demand in consumer and electronics to benefit from continued investment in artificial intelligence, data centres and advanced devices, while acknowledging more challenging conditions in other sectors.