Dow Announces Closure of a Factory

Recently, Dow Chemical officially announced that in the face of recent macroeconomic uncertainty, in order to further optimize the company's cost structure and ensure the creation of long-term value, the company has decided to close its polyether polyol/alkoxylation plant located in Nangang Industrial Zone, Taiwan, China. Currently, the factory is still operating and is scheduled to cease production at the end of April 2024.

Dow Chemical emphasized that the company is working hard to minimize the potential impact this decision may have on customers or the company's participation in the market. Dow is well prepared to meet customer demand for polyether polyols and alkoxylated products and plans to provide the necessary product portfolio. At the same time, the company will maintain close cooperation with all stakeholders of the Nangang plant to ensure a smooth and orderly transition to the closure date.

Production capacity surges and competition intensifies.

Data show that China's polyether polyol production capacity reached 7.45 million tons in 2023, with an annual compound average growth rate of 7%, annual output of 4.5 million tons/year, and an annual compound average growth rate of 10.8%. The phenomenon of overcapacity continues to intensify.

The output of polyether polyols generally showed a growth trend from 2019 to 2023. Large Chinese factories such as Wanhua, Zhejiang Petrochemical, and Changhua have increased their new production capacity. Market competition has become increasingly fierce, and the elimination of old production capacity has accelerated. In this context, the advantages of companies with technical strength and scale, led by Wanhua and Shell, have become more prominent, market concentration has further increased, and construction is generally higher. However, in contrast, small, medium and micro enterprises may face the risk of business closure.