Howard Ungerleider
President & Chief Financial Officer at DOW
Thank you, Jim. And good morning, everyone. Turning to Slide 5. In the fourth quarter, we see a continuation of robust demand growth across our packaging, infrastructure, consumer, and mobility end markets. Brand owner inventory levels remain low, and as a result, we anticipate higher seasonal demand continuing into the holiday season this year.
In Packaging and Specialty Plastics. We continue to see resilient demand for packaging applications and for our differentiated functional polymers. Global polyethylene supply remains constrained as the industry completes higher turnaround activity and supply chains recover from weather events on the US Gulf Coast.
We exited the third quarter experiencing higher raw material and energy costs, which we anticipate will likely persist through the fourth quarter. We expect these costs to be an approximately $350 million headwind sequentially. Dow will continue to utilize our broad geographic footprint and best-in-class feedstock flexibility to help mitigate these impacts. We also anticipate a $175 million tailwind from turnarounds in the quarter as we completed our planned maintenance at our crackers in Canada.
In Industrial Intermediates & Infrastructure, continued consumer demand for furniture and bedding, appliances, pharma, and home care are expected to keep supply tight in our key value chains. Due to the weather-related outages in the third quarter, some of our planned turnaround activity was moved to the fourth quarter. Sadara will also start the turnaround at its isocyanates facility in the fourth quarter as well. Altogether, we anticipate $100 million in this segment from turnaround impacts.
Short-term increased energy costs in the US Gulf Coast and Europe are expected to be an additional $100 million headwind in the quarter. We continue to see sequential recovery in industrial activity, particularly for energy applications. We anticipate this recovery will continue at least through the fourth quarter as industrial production continues to ramp up from very low inventory levels to meet demand.
In Performance Materials & Coatings, demand for electronics, mobility, building construction continues to outpace supply. Demand for architectural coatings is also expected to remain elevated due to the persistently low inventory levels across the value chain. Global production for silicones has been impacted by the recent Dual Control policy enforcement actions in China. With silicon metal prices almost 3 times their previous highs, we intend to pull forward a scheduled turnaround at our siloxane facility in Zhanjiang, China to coincide with government actions to curtail power usage. Our current estimate for the quarter includes $125 million from increased raw material costs and turnaround impacts. We'll continue to work on mitigating the impact of rising raw material costs through our integrated position in both businesses. Despite higher raw material and energy costs in the fourth quarter, Dow will continue to leverage its advantage global footprint, structural cost, and feedstock advantages as well as our broad suite of differentiated products to meet growing demand.
On Slide 6, as we look ahead, we expect robust economic growth to continue. With the Delta variant slowing the reopening of economies around the world, there remains significant pent-up demand globally, particularly across our industrial and consumer end markets. Many industries continue to see elevated order backlogs coupled with low inventory levels as supply chains struggle to keep up with robust demand. These supply chain disruptions are expected to persist, which will certainly prolong the ability to restock inventories across most value chains. As a result, we expect tighter than forecasted market conditions to continue, a view strengthened by China's recent Dual Control policy that is impacted both coal to olefins and methanol to olefins based capacity, which represent more than 30% of China's total polyethylene production.
2022 GDP growth forecasts are well above historical averages in most areas of the world as the industries ramp up to match the robust consumer demand with further upside as global chip shortages continue to extend the recovery and manufacturing. Collectively, G-7 countries have not yet fully recovered to pre-pandemic GDP. This points to an additional upside as economies return to more normalized consumption levels with the degree of vaccination increasing, particularly in Asia where levels remain low relative to the rest of the world.
Moving to Slide 7. At our Investor Day earlier this month, we outlined how our differentiated portfolio and our focus on sustainability-driven innovation will enable more than $3 billion in underlying EBITDA improvement across the cycle. Our restructuring program and digital investments will yield $600 million in increased EBITDA, both are in progress and our restructuring program is on track to achieve its $300 million run rate by year-end.
We also have a suite of higher return, lower risk, and faster payback capital and operating investments that will enable an additional $2 billion in EBITDA in the near term and our investments to decarbonize and grow at our Fort Saskatchewan site in Alberta, Canada are also expected to deliver approximately $1 billion in increased EBITDA. And as we've already shared, we're executing against a favorable macro backdrop that we expect will continue to support constructive market fundamentals for our key value chains.
Turning to Slide 8. You will see the detailed list of these low-risk growth investments. Our capital investments are expected to generate $1 billion in EBITDA through our incremental capacity expansions, debottlenecking, and enhanced feedstock flexibility across our operating segments. We're already making good progress. For example, in Packaging and Specialty Plastics, our Fort Saskatchewan expansion to add ethylene capacity of 65,000 metric tons per year to support growing polyethylene demand is now complete and will ramp by the end of the fourth quarter. Our FCDh pilot plant in Louisiana will start up in 2022, featuring 20% to 40% lower capex and 5% to 7% lower opex, while reducing CO2 emissions by up to 20% compared to other PDH technologies.
In Industrial Intermediates & Infrastructure, our debottlenecking project to add 60,000 metric tons per year of aniline will be fully online by year-end. And earlier this year, we signed an MOU for a new South China hub serve to advance local supply and formulating capabilities to serve the fast-growing Asia-Pacific market.
In Performance Materials & Coatings, we recently completed a capacity expansion at one of our silicon polymer plants. And by year-end, we will complete a new silicone sealant compounding unit to enable sustainable solutions for high-performance building and infrastructure applications. And we are progressing our 50kt methyl acrylate [Phonetic] investment on the US Gulf Coast to support global end markets such as inks, resins, and packaging materials, which is scheduled to come online in the first half of next year. In addition, our operating investments are also expected to generate another $1 billion in EBITDA as we improve our production capabilities and shift our product mix to higher growth and higher value markets.
For example, in Industrial Intermediates & Infrastructure, we're increasing capabilities and shifting our mix toward higher-margin polyurethane systems for mobility and consumer applications. Our industrial solutions business has increasing capabilities to supply differentiated materials into the textile market. Our equal fast collaboration was Ralph Lauren lowers energy usage by 40% and water usage by 50% in the fabric dyeing process. And by 2025, the brand aims to incorporate this technology in more than 80% of its solid cotton products.
In Performance Materials & Coatings, we're expanding our ability to formulate differentiated silicones for a number of attractive markets, including silicone adhesives for foldable displays in consumer electronics, thermal conducted silicone solutions for electric vehicles, and silicone solutions for 5G, where the market is expected to more than double over the next 10 years. And we recently partnered with customers on high-value innovations like paper barrier coating applications that use our award-winning RHOBARR polyolefin dispersion technology and Callaway's super soft golf balls, which feature a new hybrid cover made with Dow's PARALOID Impact Modifier.
In Packaging and Specialty Plastics, we're enhancing our extensive conversion and testing capabilities to commercialize resins through packaging design, speeding innovation process, and expanding the addressable market for higher margin and more sustainable products. For example, we're already benefiting from the nine-layer blown film extrusion line project completed this year. We're also making investments to improve asset reliability, which will increase output and expand margins and we're using digital technology for customer trials and process automation to accelerate catalyst development for new resins and processes like FCDh, where we can typically be 100 times more efficient than conventional experimentation.
Collectively, our slate of near-term investments will generate an increase of approximately $2 billion in underlying EBITDA and we intend to deliver this growth with a disciplined and balanced approach, maintaining our top quartile performance and cash flow, cost structure, debt reduction, and shareholder remuneration.
With that, I'll turn it back to Jim.
