Dow to close some units

• By GARY PERILLOUX
• Advocate business writer
• Published: Jul 2, 2009 - Page: 6B

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Dow Chemical Co. said Wednesday it will close several Louisiana processing units — affecting about 100 jobs in Plaquemine and Hahnville — as part of a shift away from basic chemicals toward more lucrative specialty chemicals.

Two of the ethylene units already were idle in Hahnville while another pair of units in Plaquemine will continue operating until 2011, company officials said.

In January, Dow announced layoffs that led to 230 people losing their jobs — about 140 in Plaquemine and 90 at the St. Charles Operations in Hahnville.

The scenario is different this time, said Stacey Chiasson, a spokesman based at Dow Louisiana Operations in Plaquemine.

Fewer than 10 people in Hahnville will lose their jobs in the coming weeks, she said, while the remainder of the 100 affected employees could be reassigned to other Dow positions.

“We’re making decisions and investments to be as competitive as possible here so that we remain here,” Chiasson said. “We will make product all over the world, but we’re making decisions for Louisiana based on what will make us most competitive on the Gulf Coast, so that we maintain our presence here.”

The closing plants, which are among dozens of chemical processing units at the Plaquemine and Hahnville sites, make ethylene, a building block for basic chemicals such as plastic and packaging.

The basic chemicals market is heavily affected by price fluctuations in crude oil, and products are usually made and sold in large batches and at razor-thin profits. Specialty chemicals — which are used in products such as cosmetics and food additives — tend to be made in smaller batches, and are more profitable.

Dow is essentially saying it won’t buy ethylene from other suppliers anymore. It had bought about 3 billion pounds a year and is cutting its ethylene use by 30 percent on the Gulf Coast. That total includes previously announced closings at Dow plant sites in Seadrift, Texas, and Freeport, Texas.

In Plaquemine, the company’s payroll has dropped from more than 3,000 direct and contract employees last year to a current roster of 2,760 workers. About 1,460 are direct Dow employees.

Hahnville has 2,000 workers who are about evenly split between contractors and company employees.

There, Dow will permanently idle an ethylene cracker and an ethylene oxide-ethylene glycol production unit, but the company said it expects to spend money over the next two years upgrading sister units in St. Charles that make the same product.

In Plaquemine, ethylene dichloride and vinyl chloride monomer facilities will be phased out over the next two years.