Dow Announces Actions to Streamline and Remove Stranded Costs In Advance of Dow Chlorine Products Transaction
May 04 2015 - 8:00AM
Business Wire
The Dow Chemical Company (NYSE: DOW) today announced a series of
actions to further streamline the organization and optimize its
footprint as a result of the Company’s pending separation of a
significant portion of its chlorine value chain.
Dow has shifted its portfolio toward targeted, integrated
high-value markets, and as a result the Company is taking
additional actions to further enhance its organizational
effectiveness – with a focus on driving geographic market
engagement coupled with global efficiency – to deliver maximum
value from its growth investments.
The actions will further accelerate Dow’s value growth and
productivity targets, and will result in a reduction of
approximately 1,500 – 1,750 positions, or approximately 3 percent
of the global workforce. In parallel, the Company is also
announcing additional minor adjustments to its asset footprint to
enhance competitiveness.
The Company will take charges totaling approximately $330
million – $380 million in the second quarter of 2015 for asset
impairments, severance and other costs related to these measures,
which are expected to be completed during the next two years. Once
fully implemented, these actions are expected to result in
approximately $300 million of annual operating cost savings.
“At our Investor Day last fall, we committed to a new,
three-year $1 billion productivity drive. Our productivity efforts
continue to center on cost-out actions and doing more with the
resources we have in place, all to enable higher earnings,” said
Howard Ungerleider, Dow’s chief financial officer. “We executed
against each of our financial, operational and strategic objectives
again in the first quarter, and today’s announcement illustrates
our ongoing commitment to the consistent implementation of our
strategy moving forward and proactively addresses any stranded
costs from the divestment of Dow Chlorine Products.”
In parallel, minor asset footprint adjustments will be made to
select manufacturing facilities. The facilities impacted represent
less than one percent of the Company's net property value and
include minor consolidation and shut downs in response to changing
market dynamics and to position the relevant businesses for
long-term growth.
The Company will involve local stakeholders as defined in each
country and in compliance with relevant information and
consultation processes.
About Dow
Dow (NYSE: DOW) combines the power of science and technology to
passionately innovate what is essential to human progress. The
Company is driving innovations that extract value from the
intersection of chemical, physical and biological sciences to help
address many of the world's most challenging problems such as the
need for clean water, clean energy generation and conservation, and
increasing agricultural productivity. Dow's integrated,
market-driven, industry-leading portfolio of specialty chemical,
advanced materials, agrosciences and plastics businesses delivers a
broad range of technology-based products and solutions to customers
in approximately 180 countries and in high-growth sectors such
as packaging, electronics, water, coatings and agriculture. In
2014, Dow had annual sales of more than $58 billion and
employed approximately 53,000 people worldwide. The Company's
more than 6,000 product families are manufactured at 201 sites
in 35 countries across the globe. References to "Dow" or the
"Company" mean The Dow Chemical Company and its consolidated
subsidiaries unless otherwise expressly noted. More information
about Dow can be found at www.dow.com.
Note: The forward-looking statements contained in this document
involve risks and uncertainties that may affect the Company’s
operations, markets, products, services, prices and other factors
as discussed in filings with the Securities and Exchange
Commission. These risks and uncertainties include, but are not
limited to, economic, competitive, legal, governmental and
technological factors. Accordingly, there is no assurance that the
Company’s expectations will be realized. The Company assumes no
obligation to provide revisions to any forward-looking statements
should circumstances change, except as otherwise required by
securities and other applicable laws.
®TM Trademark of The Dow Chemical Company (“Dow”) or an
affiliated company of Dow
For further information contact:The Dow Chemical CompanyRachelle
Schikorra, +1 (989) 638.4090ryschikorra@dow.com
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