Recently announced ventures linking Exxon Chemical Co. with Union Carbide Corp., and Dow Chemical Co. with BP Chemicals are the latest examples of dramatic changes shaking the plastics industry. Exxon and Dow, with significant investments in metallocene catalyst technologies, apparently saw that they easily could benefit from the existing resin production infrastructure established by Union Carbide and BP-the No.1 and No.2 leading licensers of polyethylene production technology, repectively, in the world.
At the same time, Union Carbide and BP licensees stand to gain from access to metallocene technology-which many observers consider the most significant new technology introduced to the PE business in 20 years.
These marriages seem to be textbook win-win situations.
Exxon and Dow stand to gin licensing fees for their technologies; Union Carbide and BP gain from renewed-perhaps unlooked for-life for their own affluent licensing operations; and the numerous existing licensees have the opportunity to develop new resin products and markets with the technologies soon to be at their disposal.
Several years ago, these kinds of joint ventures were virtually nonexistent. Today, there are so many as to be almost run-of-the mill. They aren't front-page news anymore.
While the recent alliances have centered on metallocene catalysts and similar advanced technologies, it is not too far a stretch to see the potential for other extraordinary alliances in the future.
What if a company like Dow nerged its $5.4 billion Performance Plastics operations with DuPont Co's $2 billion Engineering Polymers business?
A $7.4 billion company that combined DuPont's strengths in crystalline engineering thermoplastics (and some amorphous ETPs) with Dow's strengths in amorphous ETPs (and some crystalline ETPs) could be a formidable developer of new technologies and products.
Not to pick solely on Dow and DuPont, but it is easy to see how such an alliance could provide a win-win situation for the companies and their customers,
This is mere speculation.
But 10 years ago such speculation would have provoked laughter. Today, it may raise a snicker, but remains within the realm of possibility. Any number of competitors today seem to be considering new formulas to breathe new life into existing businessess- even though those businesses are not stagnant.
That plastics companies are or may be considering such options is evident from the recent Exxon/Union Carbide and Dow/BP deals. Bringing these deals to reality will stimulate grouth and excitement to keep this industry vigorous and dynamic.