Dow Inc. (DOW) Halts $9 Billion Petrochemical Project in Canada
U.S. chemical giant Dow Inc. (DOW) has paused construction of a $9 billion net-zero petrochemical project in Canada, citing weak market conditions.
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Formerly known as the 'Dow Chemical Company,' the Michigan-based concern is one of the three largest chemical producers in the world. It previously committed to build the 'Path2Zero project' in the western Canadian province of Alberta, which is the center of Canada's oil and gas industry.
However, after a 'comprehensive review,' Dow says that it has decided to push back the timeline for the project. No new timeline for its completion has been announced. Management at Dow says it is adjusting to what is sees as a 'lower-for-longer earnings environment' in coming quarters due to macro-economic and market uncertainty caused by U.S. trade tariffs.
Job Losses
As such, management at Dow says they won't need the Canadian project's output as early as thought and will pause construction on the petrochemical plant until market conditions improve. The delay means that Dow won't be spending $1 billion in Canada this year.
The project was expected to create 5,000 jobs in Alberta during the construction phase and about 450 full-time jobs once the plant was operational. Dow previously said that the massive Canadian project would be the world's first net-zero greenhouse gas emission petrochemical plant.
DOW stock has declined 25% so far this year.
Is DOW Stock a Buy?
The stock of Dow Chemical has a consensus Hold rating among 16 Wall Street analysts. That rating is based on three Buy, 11 Hold, and two Sell recommendations issued in the last three months. The average DOW price target of $34.87 implies 17.68% upside from current levels.
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