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Dow to carve-out $5bn commodity chemicals business
03
Dec '13
The Dow Chemical Company detailed the scope of a separation of a significant portion of its chlorine value chain.

These assets are being carved out for future transactions, and represent up to $5 billion of total annual revenue, inclusive of sales on the merchant market and sales to support Dow’s downstream, value-added products. The scope includes approximately 40 manufacturing facilities at 11 sites, and nearly 2,000 employees.

“Today’s announcement represents a continuation of the shift of our Company toward downstream high-margin products and technologies that customers value, and generate consistently higher returns than cyclical commodity products. We are committed to prioritize our resources such that we maximize total shareholder return,” said Andrew N. Liveris, Dow’s chairman and chief executive officer.

“These businesses have served us well over decades, but are serving markets that Dow has exited over time, and we are therefore right-sizing our upstream integration to match the downstream focus that we started a decade ago,” Liveris added. “Separating these business units will allow us to further optimize the way they can be operated; and we believe different owners will be able to extract maximum value from these highly competitive assets and their related markets.”

Announcement outlines a clearly defined scope of businesses that are located in attractive regions and are backed by a low-cost energy position attractive for producers of chlorine-based chemicals such as caustic soda and PVC. Further, they are coupled with businesses that command industry-leading positions with world-scale assets and global capabilities.

Assets included in this carve-out are:

Dow’s U.S. Gulf Coast Chlor-Alkali and Chlor-Vinyl facilities in Plaquemine, LA, and Freeport, TX, including Dow’s interest in the Dow Mitsui Chlor-Alkali joint venture in Freeport, TX;

- Dow’s Global Chlorinated Organics production facilities in Freeport, TX; Plaquemine, LA and Stade, Germany;

- Dow’s Global Epoxy business, including assets in Freeport, TX; Roberta, GA; Rheinmuenster, Germany; Pisticci, Italy; Baltringen, Germany; Stade, Germany; Gumi, South Korea; Zhangjiagang, China and Guaruja, Brazil; and

- Dow’s brine and select assets supporting operations in Freeport, TX and Plaquemine, LA; and energy operations in Plaquemine, LA.

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