Dow makes major changes to its ABS business

Mo, 10 December 2007

Dow Chemical is making major changes to its ABS resin business, exiting all markets but automotive and converting two of its three ABS sites in the US into polystyrene production.

Dow will exit all non-automotive markets for ABS by 1 February, officials said in a news release. ABS production in Ironton, Ohio, and Gales Ferry, Connecticut, will be converted to PS and will be included in the firm’s pending PS joint venture with Chevron Phillips Chemical.

The move also affects Dow’s sales of styrene acrylonitrile. Dow’s ABS and SAN assets in Europe are not affected by the change in strategy.

After those moves, Dow’s only ABS production site in the US will be in Midland.

“This decision has been made after a thoughtful and prudent assessment that clearly indicated the fundamentals of the market do not support our continued involvement,” engineering plastics business director Mark Remmert said in the release.

The move leaves Sabic Innovative Plastics and Lanxess as the only two major suppliers of ABS in the US and Canada.

The ABS market has been hurt in recent years by competition from polypropylene and other lower-priced resins. More recently, ABS has been impacted by higher prices for benzene, a feedstock used to make ABS component styrene monomer.

The ABS announcement was made on the same day that Dow announced it was cutting 1,000 jobs and closing several plants worldwide in an attempt to improve the firm’s financial performance. A styrene monomer plant in Camaзari, Brazil, is among the plants being closed.