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Dow adding PE capacity in North America

By: Frank Esposito

March 18, 2013

MIDLAND, MICH. -- Dow Chemical Co. is joining the growing list of resin makers that are adding polyethylene capacity in North America.

Officials with Midland, Mich.-based Dow said in a March 18 news release that the firm would build several new production units on the U.S. Gulf Coast. Products made at these units include Elite-brand enhanced PE, specialty low density PE and high-melt index elastomers. Dow previously had announced plans to add metallocene EPDM capacity in the Gulf Coast and to build a new plant making ethylene feedstock at its massive complex in Freeport, Texas.

"These investments are aimed at businesses that have consistently delivered a higher return on capital, which is clearly aligned with our long-term strategy," executive vice president Jim Fitterling said in the release.

Dow officials added that the new construction "further connects the company's U.S. manufacturing operations with cost-advantaged feedstocks available from increasing supplies of shale gas in North America." The new units also will create "thousands of new, high-paying jobs across the country's manufacturing sector."

Materials made by the new units will be sold into several end markets, including packaging, hygiene and medical, electrical and telecommunications, transportation, sports and leisure and consumer durables. Engineering and design work for the new units is expected to be completed in 2014.

Dow already ranks as one of the world's largest PE makers. No capacity totals or investment amounts for the new projects were included in the release. The combined Dow projects — including the new ethylene cracker — will employ 5,000 at construction peak and will support more than 35,000 jobs in the broader U.S. economy, officials said.

Also on March 18, Dow announced plans to build a new linear alpha olefins unit in the Gulf Coast in conjunction with Japanese materials firm Idemitsu Kosan Co. Ltd. and Mitsui & Co. Ltd. Dow uses linear alpha olefins in production of its polyethylene and elastomer materials

The linear alpha olefins announcement "further illustrates Dow's commitment to invest in high-return projects that deliver advantaged feedstocks for our differentiated, downstream derivatives," Andrew Liveris, chairman and chief executive officer, said in a news release.

Producers that already have announced North American PE expansions include ExxonMobil Chemical Co. and Chevron Phillips Chemical Co. LP.