NEW YORK - Dow Chemical Co. and DuPont Co. intend to form a billion-dollar company that will combine Dow's metallocene catalyst technology with DuPont's synthetic rubbers business. The new company will blend DuPont's seasoned market position with Dow's technology just out of its infancy.
At a Jan. 31 news conference in New York, the companies said Dow will contribute nearly half of the metallocene technology it has developed to produce thermoplastic elastomers. They said the new company will have annual sales of about $1 billion.
The name, management structure and potential headquarters have not been determined, said Ed Gambrell, Dow vice president for Insite Technology Platform. Insite is Dow's trade name for its metallocene catalyst technology. Also, at this early stage, the number of employees, plants and other facilities have not been determined.
Dow and DuPont will shareownership equally, according to Don Duncan, general manager of the DuPont Elastomers Strategic Business Unit.
Duncan said Dow and DuPont are projecting sales growth of 7-10 percent per year, which will double the new company's sales to $2 billion within five years. About one-third of the sales are expected to be in transportation markets, Duncan said.
Dow and DuPont have signed a letter of intent to form the new enterprise, which is subject to the approval of a number of regulatory agencies worldwide.
The new company will develop, produce and market existing and new thermoplastic and thermoset synthetic rubber compounds and elastomers for automotive, construction, wire and cable, polymer modification, oil modification and adhesive applications, Duncan and Gambrell said.
DuPont is contributing thelion's share of existing sales and market presence to the new enterprise, while Dow is contributing its metallocene technology and a 200 million-pound-per-year production facility in Plaquemine, La.
The new firm gives Dow of Midland, Mich., an immediate market presence for its 12 Engage TPE resins it introduced a year ago.
Engage products are one of two lines Dow developed using its metallocene catalyst technology. This new venture does not affect Dow's Affinity polyethylene products, which are based on metallocene technology.
Dow's Plaquemine facility is being converted from the production of high-molecular-weight, high density PE, and will make ethylene propylene diene monomer and other ethylene-propylene rubbers using metallocene catalysts by the fourth quarter of 1996, Gambrell said.
The new company gives DuPont of Wilmington, Del., immediate access to expensive metallocene catalyst technology to develop new synthetic rubbercompounds for a variety of applications.
DuPont will contribute the sales and production facilities for its Nordel EPDM rubbers, Hypalon chlorosulfonated PE, Neo-prene polychloroprene, Viton and Kalrez fluoroelastomers, Advanta fluoroelastomer alloys and its Zalek high-performance TPEs.
Duncan and Gambrell said the new enterprise will research new technologies and products, while being able to rely on Dow's and DuPont's research and development facilities.
``This new company will be driven by technology, and will deliver everything from common EPR products to high-performance elastomers. Speed will be a hallmark of this joint venture and its products,'' Duncan said.
While it will offer the existing lines the parent companies are contributing, the new firm immediately will seek to produce ``drop-in'' replacement items for EPR products using Dow's metallocene technology, he said.
Duncan said the products will cost less, perform better and will not require costly modifications to processing equipment. He said there are no plans to eliminate existing products, and they will be produced as long as market demand exists for them.
Further, he said he expects new technologies to produce replacements for difficult-to-handle and undesirable products, such as halogenated EPDM rubbers.
Gambrell said he expects the new company to establish a European production facility, while developing markets in the Pacific Rim soon after it is established.