Dow Announces Actions to Streamline and Remove Stranded Costs In Advance of Dow Chlorine Products Transaction
By Business Wire News
By Business Wire News
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.
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.
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For further information contact:
The Dow Chemical Company
Rachelle Schikorra, +1 (989) 638.4090