Dow shuts Argentina polyols plant on global oversupply

SAO PAULO (ICIS)–Dow has decided to stop producing polyether polyols at its site in San Lorenzo, in Argentina’s province of Santa Fe, on the back of poor economics, the US chemicals major confirmed to ICIS on Wednesday.

Dow said global oversupply for polyols had caused the San Lorenzo plant to persistently operate at low rates.

The company had already intended to halt polyurethane (PU) production there in 2021, but pressure from trade unions and the national government at the time stopped it from taking the decision.

According to Dow, 40 employees at the plant will be affected by the closure, although trade unions say the figure is 120.

The United Petrochemical Workers and Employees Union representing the plant’s employees said the company took the decision to shut the plant without notifying workers representatives, according to reports by local media in Santa Fe.

Dow said, however, employees had been “notified in accordance” with Argentine labor laws.

“The business driver for this final decision is aligned with the company’s strategy to optimize its asset footprint. The San Lorenzo production unit has been operating at low utilization rates, while there is an excess of installed capacity in polyol plants all over the world,” said the company.

“Dow has worked to minimize any potential impact and is well positioned to meet customer demands and deliver the product mix needed to serve them. These customers may also acquire products from other suppliers at competitive prices, as they currently do.”

The chemicals major said it would continue to “work closely with all stakeholders” of the San Lorenzo site to ensure an “orderly and smooth” transition.

The PU plant had a production capacity of 50,000 tonnes/year, according to the ICIS Supply and Demand Database.

Dow keeps a large presence in Argentina, where it is the sole producer of polyethylene (PE). Its main operating facilities are in Bahia Blanca, south of Buenos Aires, where it employs 3,000 workers in 12 production plants.

Additional reporting by Bruno Menini