SANDY SHORE AP Energy Writer — September 10, 2009
DENVER (AP) — Dow Chemical Co. said Thursday it will sell a hollow sphere plastic pigment product line to specialty chemicals maker Omnova Solutions Inc. and close two production units at a Texas plant.
Dow said styrene monomer and ethylbenzene production at the Freeport, Texas, site will close by the end of the year.
About 60 employees will be affected, with about one-half reassigned to other positions, company spokesman David Winder said. Others are expected to retire and the rest will be laid off.
The two chemicals are part of the basic chemicals market that has been heavily affected by price fluctuations in crude oil.
The closures are part of a restructuring plan announced in June shortly after Midland, Mich.-based Dow completed its $16.5 billion acquisition of Rohm & Haas Co.
Dow's goal is to shift more of its business toward specialty chemicals, which are used in products like cosmetics and food additives, and work with partners to fill basic chemical needs.
For example, it has signed a long-term contract to meet the styrene demand of its derivative business.
Dow also is integrating ethylene production to eliminate the need to purchase the chemical from other suppliers. It previously has bought about 3 billion pounds a year.
In the separate announcement, financial details of the sale to Omnova, based in Fairlawn, Ohio, were not disclosed. Hollow plastic pigments are used by the paper and paperboard industry.
The deal is contingent on the approval of the Federal Trade Commission and is expected to close in the fourth quarter. It is the last step required by the FTC as part of the Rohm & Haas acquisition.
Also on Thursday, Dow and Alstom dedicated a pilot plant that will capture about 1,800 metric tons of carbon dioxide a year at the chemical company's plant in South Charleston, W.Va.
Shares of Dow rose 13 cents to $23.05 while Omnova shares rose 6 cents to $5.08 in afternoon trading.
AP Energy Writer Deborah Jian Lee contributed to this report.