Dow Chemical Closing Plant That Produces Foam Ingredient

Posted by MCC on May 30th, 2010 at 07:00am

Furniture executives have been analyzing the effect that the closing of Dow Chemical Company’s TDI plant will have on the home furnishings industry. They’ve been debating whether or not the closing will have a direct effect on the pricing rates for raw materials.

TDI, toluene diisocyanate, is a chemical produced at the plant that is used to make foam that is used in upholstery cushions and other products. Dow has scheduled the closing for the second quarter and the furniture industry is anticipating what the decision to close the plant will bring.

Back in December, the company announced that it would be cutting 5,000 jobs, closing 20 plants and selling off seven of their businesses to save $700 million this year. Dow said the plant is being eliminated because it is no longer economically viable to manufacture TDI.

The demand in the United States has been decreasing because of the strong competition from China. Furniture executives are hoping that the closing of the Dow plant won’t have the same effect on the industry that the closing of a Louisiana TDI plant had. The Louisiana plant closed because of hurricanes and it resulted in a dramatic increase in the prices of TDI.

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