(Reuters) - Dow Chemical Co DOW.N said it is closing four plants and laying off 900 workers, part of a plan to slash costs by $250 million annually amid a weak global economy.
Steep drops in demand for construction products, especially in Europe, have hurt the chemical industry in the past year. Dow make Styrofoam, a key insulation material used in home and commercial construction.
The company said on Monday it will record $350 million in one-time charges for the plant closures and layoffs. About $110 million of the total will go to laid-off workers.
Dow said it will close Styrofoam plants in Illinois, Hungary and Portugal. It will also idle a Styrofoam plant in the Netherlands.
Hungary and Portugal especially have “very poor market conditions and unfavorable economic outlooks,” Dow spokeswoman Rebecca Bentley said.
Dow, based in Midland, Michigan, will also close a Brazilian plant that produces toluene diisocyanate, a chemical needed to make polyurethane.
In the fourth quarter of 2011 Dow recorded a $264 million tax charge for its Brazilian operations. The charge was related to low profitability throughout the country, Bentley said.
“This plant was a significant contributor to that,” she said. “Now we’re announcing we’re permanently shutting down that plant.”
The company has roughly 52,000 workers around the world.
Reporting By Ernest Scheyder; Editing by Gerald E. McCormick and John Wallace