Dow Chemical 2009 Annual Report Download - page 128

Table of Contents
·Due to overcapacity within the industry, a disadvantaged cost position and increasing pressure from generic suppliers, the Company launched an
information/consultation process with local employee representatives on a closure project in the fourth quarter of 2007 and recorded an asset
impairment charge related to its agricultural products manufacturing site located in Lauterbourg, France. Upon completion of the
information/consultation process, the plant was shut down in the fourth quarter of 2008. A $44 million write-down of the net book value of the related
buildings, machinery and equipment against the Health and Agricultural Sciences segment was recorded in the fourth quarter of 2007.
·The Company evaluated the economic and financial feasibility of its styrene plant in Camaçari, Brazil, and due to raw material competitiveness, the
age of the facility, as well as the ready availability of styrene within the global marketplace, the Company idled the facility in the fourth quarter of
2007 and recorded a $14 million write-down of the net book value of the related buildings, machinery and equipment against the Hydrocarbons and
Energy segment. The assets were sold in the fourth quarter of 2009.
·The Company decided to close its hydroxyethyl cellulose manufacturing facility located in Aratu, Brazil, due to a number of factors, including
capacity limitations, high structural and raw material costs, and older technology. A $12 million write-down of the net book value of the related
buildings, machinery and equipment was recorded against the Electronic and Specialty Materials segment in the fourth quarter of 2007. The facility
was shut down in the first quarter of 2008.
·The Company determined that the operating costs of its fiber solution manufacturing plant in Tarragona, Spain, could not be sustained. The
Company is continuing to evaluate more economically viable alternative manufacturing options. As a result, the Company recorded a $29 million
impairment write-down of the net book value of the related buildings, machinery and equipment against the Performance Systems segment in the
fourth quarter of 2007.
·Due to a number of factors, including the inability to secure an economically sustainable source of propylene and the use of older technologies at the
plant, Union Carbide decided in the fourth quarter of 2007 to shut down its polypropylene facility at St. Charles Operations in Hahnville, Louisiana.
As a result of the decision, a $23 million write-down of the net book value of the related buildings, machinery and equipment was recorded against
the Basic Plastics segment in the fourth quarter of 2007. The plant was shut down in the first quarter of 2008.
·The Company determined that it would not be possible to renegotiate an economically viable contract manufacturing agreement to continue the
operations of the rubber plant located in Berre, France. A $27 million impairment write-down of the net book value of the related buildings,
machinery and equipment was recorded against the Performance Systems segment in the fourth quarter of 2007. The plant was shut down in the
second quarter of 2008.
·The Company assessed the long-term profitability of its participation in the automotive sealants business and determined that the projected results are
inconsistent with the financial performance expected of a market-facing business. As a result, in the fourth quarter of 2007, the Company made the
decision to exit the automotive sealants business in North America, Asia Pacific and Latin America by mid-2009, which was completed in 2009. The
business explored strategic options within Europe and decided in the fourth quarter of 2008 to divest the automotive sealants business within Europe.
A $58 million write-down of the net book value of the related buildings, machinery and equipment against the Performance Systems segment was
recorded in the fourth quarter of 2007.
In addition to the write-downs described above, the restructuring charges for plant closures included $66 million related to the shutdown of several
small production facilities and the closure of certain storage wells in Canada.
The restructuring charges in the fourth quarter of 2007 also included the write-down of investments in nonconsolidated affiliates of $99 million. The
most significant write-downs were related to the Company’s investment in Pétromont and Company, Limited Partnership (“Pétromont”) and Dow Reichhold
Specialty Latex LLC. Details regarding these write-downs are as follows:
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