Sarnia, ON - August 31, 2006
Dow Chemical Canada Inc.’s Sarnia site announced today that local manufacturing operations will cease by the end of 2008.
The decision to stop production at the Sarnia site was precipitated by Dow’s inability to secure anysupply of ethylene, the principal feedstock for its Low Density Polyethylene (LDPE) unit. This followed the March 7th suspension of ethylene delivery from Western Canada through the Cochin Pipeline. The operators of the pipeline, Dome Pipeline Corporation and Cochin Pipe Lines Ltd., subsidiaries of BP Canada Energy Resources Company (“BP”) had advised Dow that the suspension was necessary ‘to ensure the appropriate safety margin for operations.’ The decision to shut down Dow’s LDPE unit changed the overall economics of the site and triggered assessments by each of the other businesses that had manufacturing facilities located in Sarnia. The individual business assessments highlighted a variety of issues related to the cost effectiveness, efficiency and age of the remaining Sarnia-based manufacturing facilities.
“This was a difficult decision that was made only after every other option was exhausted,” said Jeff Johnston, President of Dow Chemical Canada Inc. “The production and infrastructure provided by Sarnia’s LDPE unit was an important economic foundation for the remainder of the site’s operations. Without the ongoing support from our LDPE unit, the other manufacturing facilities could not remain competitive.
“I am personally committing that throughout this process, Dow Chemical Canada Inc. will treat impacted employees fairly and with compassion, dignity and respect. I cannot emphasize strongly enough that the decision to shut down these facilities in no way reflects on the work and dedication of our Dow employees.”
All jobs located at the Sarnia site will be affected by the announcement. The reduction of the site’s 340 employees and 40 contractor workers will coincide with the phased cessation of production. A variety of options, including early retirement provisions, potential redeployment to other Dow locations, and the potential establishment of home-based offices may help reduce the effects of this decision.
“Our first priority is to support our employees and to ensure that production is concluded in a safe and environmentally responsible manner, to minimize the effects on our community, customers and suppliers,” said Glen Mutscher, Director of Sarnia Site Operations. “We are very mindful of the legacy that binds Dow Sarnia employees, past and present, to Sarnia-Lambton and we will continue to meet our community, environmental and business obligations.”
The site’s LDPE and Polystyrene units will close in 2006. Operations at the Acrylate Latex and Propylene Oxide Derivatives units will cease during 2008. In addition, Dow’s Product Development Plant will be moved from a mothballed state to permanent shut down, and the Hydrocarbons storage caverns and related assets are expected to be sold.
About The Dow Chemical Company
Dow is a diversified chemical company that harnesses the power of science and technology to improve living daily. The Company offers a broad range of innovative products and services to customers in more than 175 countries, helping them to provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. Built on a commitment to its principles of sustainability, Dow has annual sales of $46 billion and employs 42,000 people worldwide. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.
Dow Chemical Canada Inc., a subsidiary of The Dow Chemical Company, employs approximately 1,300 people in Canada. Headquartered in Calgary, Alberta, Dow Canada and its affiliates have manufacturing locations in: Sarnia and Toronto, Ontario; Fort Saskatchewan and Prentiss, Alberta; and Varennes, Quebec. For more information about Dow Canada, please visit our web site at www.dowcanada.com.
For Editorial Information:
Mimi Long
The Dow Chemical Company
1 (800) 361-6650
