Dow Plans to Shut Down Key Facilities and Assess European Assets as Sales Decline by 15%, Raising Market Concerns

Dow has announced that it is conducting a strategic review involving some of its assets in Europe. These assets account for about 20% of Dow's total European sales, mainly in the polyurethanes segment. In addition, Dow plans to close its Freeport, Texas, propylene oxide (PO) plant in 2025 as part of its efforts to rationalize global polyol production capacity. Dow has already reported third-quarter results, with sales and operating income both up slightly.

"This strategic review is necessary in Europe given the current market dynamics in the region, including a lack of demand recovery and a lack of clear, consistent and competitive regulatory policies," said Jim Fitterling, Dow's chairman and chief executive officer. Dow noted in a report that as of 2024, sales in the Europe, Middle East, Africa and India (EMEAI) region were more than 15 percent below 2021 levels.

Dow said it would consider "all value-creating options" as it reviewed its European assets. In 2023, Dow's sales in the EMEAI region reached $14.5 billion, while the assessed assets had annual revenues of approximately $3 billion. Dow expects to complete the strategic review by mid-2025.

Jim Fitterling further stated, "Over the past several years, we have demonstrated our commitment to operating with the best owner mindset by taking aggressive actions to select high-cost assets that are in line with changing market dynamics."

Dow plans to shut down its propylene oxide plant in Freeport, Texas, which has a capacity of 550,000 tons per year, or about 20 percent of the industry's capacity in North America. Dow also manufactures propylene oxide in Plaquemine, Louisiana. Other U.S. producers include LyondellBasell and a joint venture between LyondellBasell, Covestro and Indorama.

Jeff Tate, Dow's chief financial officer, said the global supply of propylene oxide has grown 50 percent over the past four years. "The market is oversupplied at the moment and operating rates are low, which puts pressure on margins." While Dow did not provide specific details, it said they have taken more than 20 "asset actions" since 2023, including targeted rationalization of global polyol capacity and closure of coatings assets. Most of the action to date has been in Europe and in the industrial intermediates and infrastructure businesses, including polyurethanes.