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August 18, 1997 02:00 AM

DOWBRANDS COULD GO ON BLOCK

Sarah S. Smith PLASTICS NEWS STAFF
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    In its continuing quest to restructure, Dow Chemical Co. has hired Goldman Sachs & Co. of New York to explore selling its DowBrands LP wholly owned subsidiary.

    ``We're looking at a variety of options to maximize the value of DowBrands,'' said Darlene MacKinnon of Dow investor relations. ``Selling is one option, but no decision has been made.''

    DowBrands, with sales of $781 million last year, makes some of the most-recognizable household products, including Saran Wrap and Handi-Wrap plastic film, Ziploc bags, Dow Bathroom Cleaner with Scrubbing Bubbles, Spray 'n Wash, Fantastik and Glass Plus cleaners. Company officials were not able to break out the plastic sales for DowBrands. Pedro Reinhard, Dow Chemical chief financial officer, described the DowBrands business as nonstrategic.

    DowBrands employs 1,000 and is headquartered in Indianapolis. It manufactures plastic wrap at Bay City and Midland, Mich., and bags at its Fresno, Calif., and Varennes, Quebec, locations. Its business units are home food-management products and home-care products.

    In October, through the transfer of assets and existing businesses, DowBrands and Melitta Bentz KG of Germany formed a 35-65 joint venture named Cofresco Frischhaltrprodukte GmbH & Co. KG. The new company focuses on the sale of food-care products in Western Europe. The value of the net assets was $29 million.

    DowBrands was set up as an independent subsidiary in 1991 by outside investors who made cash contributions of $900 million and three wholly owned Dow subsidiaries that extended an additional $2 billion.

    The investors receive a cumulative annual priority return of $68 million.

    Dow Chemical has invested in new plants in South America, Europe and Asia as part of its restructuring to focus on chemicals. Recently, Dow bought Eli Lilly & Co.'s 40 percent stake in DowElanco, a global agricultural chemicals division, for $900 million.

    Last week the firm's $445 million bid to purchase South Africa's Sentrachem Ltd., a specialty chemicals producer, was rejected because the offer was said to not adequately represent the value of Sentrachem's businesses.

    Midland, Mich.-based Dow Chemical, the fifth-largest chemical company in the world, had 1996 sales of $20.1 billion. Its film sales, which do not include those for DowBrands, were $150 million last year.

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