Dow Chemical set to close plant that produces foam ingredient
Furniture industry awaits effects on raw materials pricing
Furniture Today Staff -- Furniture Today, May 27, 2010
FREEPORT, Texas — Furniture executives have been debating the effect of Dow Chemical Company's closing of its TDI plant here and whether it will have an effect on the pricing of raw materials for the home furnishings industry.
TDI, or toluene diisocyanate, is a chemical used to make foam for upholstery cushioning and other products such as packaging. The company scheduled the closing for the second quarter of 2010 and the industry is waiting to see what the closure will bring.
Dow announced last December that it planned to cut 5,000 jobs or 11% of its work force, close 20 plants and sell off seven businesses to save $700 million in 2010. The company said the plant is being eliminated "because manufacturing TDI there is no longer economically viable."
Dow said it had secured an alternative supply source and would continue to provide a supply of TDI but did not specify what that source is.
Furniture execs are hoping that the shutdown will not have the same effect as the closing of a TDI plant in Louisiana because of hurricanes, which caused prices to rise dramatically on the chemical.
Furniture and bedding are major outlets for TDI.
Urethanes Technology International, www.plasticsnews.com, said the demand in North America has been shrinking as a result of strong competition from China.
Other major sources of TDI in the U.S. are BASF Corp. and Bayer MaterialScience.
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