Ag Only Bright Spot In Dow Fourth Quarter Loss
3 February 2009 Dow AgroSciences set a fourth-quarter sales record of $885 million, 2% higher than the same quarter last year. Dow AgroSciences reported that its full-year sales grew 20 percent to $4.5 billion, reflecting an 8 percent increase in volume and a 12 percent increase in price.
This marked the tenth consecutive quarter that Dow AgroSciences has recorded a sales record versus the comparative period of the prior year. Volume declined 4 percent, but price rose 6 percent. Price was up in all geographic areas except Asia Pacific, while both price and volume rose in North America.
Seed sales increased versus the same quarter last year, led by US corn sales and sunflower sales in Latin America. Sales of agricultural chemicals declined due to product shortages and lack of available credit for farmers in some regions.
Continuing its strategic growth agenda, Dow AgroSciences acquired Brodbeck Seeds, Südwestsaat GbR and the corn assets of Coodetec in Brazil, bringing the number of acquisitions since May 2007 to nine.
Its agriculture division was a bright spot for the company. The economic recession dropped demand for plastic and industrial products, resulting in Dow Chemical Co.’s first net loss in six years, according to Bloomberg.com. The loss of US $1.55 billion contrasts with a net income of $472 million a year earlier for the Michigan, US-based chemical company.
Chief Executive Officer Andrew Liveris announced that Dow will be closing factories and cutting jobs to cope with a global recession, which he predicts could last all year. In December, Dow said it will eliminate about 5,000 jobs, or 11 percent of the global workforce, permanently closing 20 facilities and idling 180 plants. Dow’s contractor workforce is being cut by 6,000 globally. Dow ran its plants at 44% capacity in December – its lowest ever – and at 64% for the total fourth quarter.
While full-year sales rose 7.5% to $57.5 billion, net income plunged 80% to $579 million, Dow Chemical said. “With a global economic crisis unfolding during the quarter, we responded with speed and urgency to get ahead of the demand destruction that continued to accelerate as we approached the end of the year,” Liveris said in the statement. “We are assuming that the late 2008 demand levels will continue for several quarters and possibly beyond.”
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