Plant Closings by Dow Chemical Join Small Group of other Canadian Chemical Plant Closures

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Researched by Industrial Info Resources (Sugar Land, Texas). Considering Canada is home to only 426 operational chemical processing plants, even a small number of plant closings are significant and three have permanently closed their doors this year already. Last week, Dow Chemical Company (NYSE: DOW) (Midland, Michigan) announced plans to further reduce the size of its Fort Saskatchewan, Alberta plant and close its Sarnia, Ontario plant, permanently, by the end of 2008.

Dow had been working for several years on plans to close the vinyl chloride monomer unit located in the Fort Saskatchewan plant and now will also close the ethylene dichloride unit and chlor-alkali production by the end of October 2006. These unit closures will ultimately reduce the estimated 1,300 people employed at the site although by how much hasn’t been immediately discussed. Dow’s 2.4 billion lb/yr ethylene unit at this site will remain in operation and its next major turnaround is not planned to take place until 2010. In Sarnia, although the complete plant closure is a couple of years away, Dow will begin to cease production of several products including low density polyethylene, polystyrene and latex operations by the end of the year.

Plant closings during the first quarter of the year by other chemical plant owners included Mintech Canada Incorporated (Pointe-Claire, Quebec) and its Cornwall, Ontario location plus Oxy Vinyls Canada Incorporated (Niagara Falls, Ontario) and its Fort Saskatchewan, Alberta plant. The third closing was by Erco Worldwide (Toronto, Ontario) and their location in Thunder Bay, Ontario which closed in April.

During the first quarter of next year Celanese Canada Company (Edmonton, Alberta) is expected to cease operations of their Edmonton plant permanently. Celanese has been downsizing this plant of nearly 200 people for several years starting with the closing of vinyl acetate, acetic acid and other units several years ago.

The closure of these plants is expected to have a minimal impact on future spending for the Canadian chemical processing industry (CPI), as Industrial Info had only reported $89 million in capital and maintenance spending across all six of these plant locations in the past six years. At just past mid-year Industrial Info is already tracking nearly $400 million in CPI spending planned to kick-off during 2007, of which 72% is capital projects.

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Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.