(Reuters) - Dow Chemical Co DOW.N said it will close four plants and lay 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 makes 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 Styrofoam plants in Illinois, Hungary and Portugal will close. It will also temporarily close a Styrofoam plant in the Netherlands.
The Illinois plant has about 30 workers and its operations will be consolidated with a plant in New Jersey, Dow spokeswoman Rebecca Bentley said.
Hungary and Portugal have “very poor market conditions and unfavorable economic outlooks,” 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. Dow’s shares gained 3 cents to $34.67 in midday trading. The stock has fallen 8.6 percent in the past 52 weeks.
Reporting By Ernest Scheyder; Editing by John Wallace and Maureen Bavdek