Dow Chemical selects locations for capacity expansion

By Frank Esposito
Senior Staff Reporter

Published: August 27, 2013 3:46 pm ET
Updated: September 6, 2013 1:12 pm ET

Related to this story

Topics Materials, Materials Suppliers
Companies & Associations Dow Chemical Co.

Dow Chemical Co. has confirmed some new details of their plans to add capacity for polyethylene and related materials in the U.S. Gulf Coast.

Officials with Midland, Mich.-based Dow said in an Aug. 27 news release that the firm would increase capacity for Elite-brand enhanced polyethylene and Affinity-brand polyolefin plastomers at its massive complex in Freeport, Texas.

In Plaquemine, La., Dow will increase capacity for low density PE — including material sold under the Agility trade name — and for Nordel-brand metallocene EPDM.

Total new capacity generated by the investments will be more than 2 billion pounds per year. Individual capacity totals for separate materials were unavailable. As for the timing of the projects, officials only said “construction is scheduled to begin soon.” A new ethylene plant in Freeport that would provide feedstocks for these projects is set to open in 2017. A new propylene monomer plant there is set to open in 2015.

The range of products being expanded are sold into numerous applications, including food packaging, consumer packaging and telecommunications. Dow is investing a total of $4 billion in numerous Gulf Coast projects. These projects “will be highly cost-competitive, as they will incorporate our industry-leading technology and benefit from our flexible, advantaged feedstock position from the U.S. Gulf Coast,” a Dow spokeswoman said in an e-mail response to Plastics News.

The products being expanded all are part of Dow’s Performance Plastics unit. That unit ranked as the largest of Dow’s six operating units in the first half with sales of almost $7.2 billion. The Performance Plastics expansion projects will create 200 new full-time jobs, as well as up to 4,000 temporary construction jobs.

Dow estimates that its total Gulf Coast construction effort will create 6,000 construction jobs and 35,000 related jobs in the broader economy at peak construction.

The investments are expected to generate around $2.5 billion in pretax profit once fully operational. The expansions are “part of [Dow’s] focused investment strategy on the U.S. Gulf Coast to integrate advantaged shale gas,” officials said in the release. Several petrochemical firms are adding capacity for PE and other products throughout North America because of new supplies of shale gas that are being developed via hydraulic fracturing (fracking) and horizontal drilling.

“Our history on the U.S. Gulf Coast reaches back more than 70 years, and we’re proud to continue our commitment to this important region with these strategic and accretive investments,” Executive Vice President Jim Fitterling said in the release.

Dow posted sales of around $57 billion in 2012. In the first half of 2013, Dow’s sales roughly were flat vs. the year-ago period at just under $29 billion, but the firm’s profit more than doubled to $3.1 billion. Performance Plastics’ first-half sales total was down almost 2 percent from the first half of 2012, but the unit’s pretax profit soared 33 percent to almost $2 billion in the same comparison.

On Wall Street, Dow’s per-share stock price was near $37.50 in late trading Sept. 3 — up almost 16 percent so far in 2013. Dow ranks as one of the world’s largest producers of PE, as well as of several specialty plastics.


Comments

Dow Chemical selects locations for capacity expansion

By Frank Esposito
Senior Staff Reporter

Published: August 27, 2013 3:46 pm ET
Updated: September 6, 2013 1:12 pm ET

Post Your Comments


Back to story


More stories

Image

Sabic: Rapid demand growth led to Ultem shortage

December 18, 2014 12:06 pm ET

Sabic Innovative Plastics has been increasing production capacity for its Ultem polyetherimide but it still got caught short by increasing demand for ...    More

McCann expanding in Ohio

December 17, 2014 11:59 am ET

Compounding firm McCann Plastics will spend $1.2 million on an expansion project that will create 15 new jobs at its plant in Green, Ohio.    More

French firm acquires Zimmer-brand polymer technology

December 15, 2014 4:18 pm ET

The deal includes technologies for the processing of polyesters and nylons, and approximately 40 researchers and engineers.    More

Image

Bioplastics global production capacity

December 15, 2014 10:14 am ET

   More

Image

Israeli compounder building $13.1 million facility in North Carolina

December 12, 2014 1:14 pm ET

Tosaf USA, a subsidiary of Kfar Yona, Israel-based Tosaf Compounds Ltd., will build a compounding and masterbatch production facility in North Carolin...    More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events