Dow Chemical’s plant in Melbourne’s west to shut down

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Image: Dow Chemicals (www.dow.com)

According to the Sydney Morning Herald, Dow Chemical cited on Tuesday that rising gas prices and increasing international competition as contributing factors that have led to the decision to shut its manufacturing plant in the Melbourne suburb of Altona, with 26 jobs to be lost.

Dow’s Australia and New Zealand president and managing director, Karen Dobson noted a range of factors that have impacted the plant’s economic viability, including rising costs in operations, manufacturing and energy – citing no single factor as driving the assessment conclusion, Sydney Morning Herald.

Rising energy costs have been a concern for the manufacturing industry for some time though, with Chemistry Australia in 2017 stating that manufacturers in the Australian chemistry industry are not seeing an end to rising east coast gas prices.

Chemistry Australia CEO Samantha Read then noted “Australia will pay a heavy price with job losses across the manufacturing sector. The 2014 Deloitte Access Economics Report forecast losses of 14,500 jobs between 2014 and 2021 in net present value terms, due to rising gas costs and constrained supply.”

The Victorian Chamber of Commerce and Industry believes that the Dow Chemical closure is a warning that the gas crisis cannot be ignored, calling on the Victorian Government to lift the moratorium on onshore conventional gas exploration. 

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In a media release, the Victorian Chamber believes the need for action has never been more urgent, with manufacturer Dow Chemical citing rising gas prices as a contributing factor in its decision to close its Melbourne West plant. 

Victorian Chamber Chief Executive Mark Stone AM believes more job losses will be lost unless action is taken and prices are brought back under $9/gj.

“The Victorian Government needs to act now to stop Victorian businesses from running out of gas and moving their operations out of Victoria… Businesses have been warning for years that high gas prices are posing a risk to their businesses. Now, with the news about Dow Chemical’s closure, we are seeing the worst-case scenario start to unfold, ” said Mr Stone.

“To avoid more closures, and stem job losses in the manufacturing sector, we are calling for a regulatory regime to manage the risks of individual gas supply projects on a case-by-case basis to be installed instead of the moratorium,” he added.

The news comes after Dow completed separation from DowDuPont and unveiled a new “Seek Together” brandline as part of a makeover aimed at transforming the business into a more focused, streamlined, and leading materials science company.