Dow Inc. to Record $330-360mln Charge in Q2 2025

Dow Inc. is planning to record a charge in Q2 2025 between $330 million and $360 million. The company specializes in the manufacturing and marketing of performance, intermediate, and plastic products. Its net sales are primarily generated from basic plastics (50.7%), elaborate plastics (27.6%), performance chemicals (20%), and other products (1.7%). Geographically, the company generates most of its sales in the US and Canada (38.2%), Europe/Middle East/Africa/India (32.5%), Asia/Pacific (17.9%), and Latin America (11.4%).

Dow Inc. (NYSE: DOW), a leading materials science company, has announced significant asset shutdowns and related charges for Q2 2025. The company plans to record a charge between $330 million and $360 million in the second quarter of this year. This move is part of the company's ongoing strategy to optimize its global asset footprint and enhance profitability.

The shutdowns are part of a broader restructuring effort that includes the closure of three upstream assets in Europe. These assets are located in Böhlen, Germany (ethylene cracker), Schkopau, Germany (chlor-alkali & vinyl assets), and Barry, U.K. (basics siloxanes plant). The shutdowns are expected to begin in mid-2026 and be completed by the end of 2027. The company estimates that these actions will result in an Operating EBITDA uplift beginning in 2026, ramping to 50% of the ~$200 million target by end-2027 and full delivery by 2029 [1].

Dow's actions to shut down these assets will also involve charges for both non-cash items, such as asset write-downs and write-offs, and cash items, including exit and disposal of assets, severance, and related benefit costs. The company expects these charges to range from $630 million to $790 million over four years [1].

The company's decision to shut down these assets is driven by the need to right-size regional capacity, reduce merchant sale exposure, and remove higher-cost, energy-intensive portions of its portfolio. This will improve the company's ability to supply profitable derivative demand and optimize margins.

Dow Inc. generates most of its net sales from basic plastics (50.7%), elaborate plastics (27.6%), performance chemicals (20%), and other products (1.7%). Geographically, the company's sales are primarily generated in the US and Canada (38.2%), Europe/Middle East/Africa/India (32.5%), Asia/Pacific (17.9%), and Latin America (11.4%) [1].

The company's restructuring efforts are expected to have a material impact on its financial performance. Dow Inc. will involve local stakeholders as defined in each country and in compliance with relevant information and consultation processes. Approximately 800 Dow roles will be impacted as a result of these actions, in addition to the $1 billion cost savings actions announced in January that included a workforce reduction of approximately 1,500 Dow roles globally [1].

Dow Inc. remains committed to realizing the value of its incremental growth investments and enhancing profitability and cash flow through more than $6 billion in near-term cash support. The company's actions to shut down these assets will contribute to its broader goal of achieving profitable growth and delivering a sustainable future.

References:
[1] https://finance.yahoo.com/news/dow-shut-down-three-upstream-100000820.html