Dow's final push for Kuwait JV

Dow Chemical Co. is in the unusual position of explaining the advantages of its new joint venture -- K-Dow Petrochemicals -- to the news media and people of Kuwait. Dow's partner in the joint venture is Kuwait's Petrochemical Industries Co. (PIC). The deal is scheduled to close next week -- on Jan. 1. Despite some questions raised in the news media in the Middle East, Dow has sent signals over the past few weeks that plans for the JV are moving ahead as scheduled. This story from the Amman, Jordan-based Al Bawaba Group news site, is the latest signal. The story is basically a statement attributed to comments made by Dow Chairman and CEO Andrew Liveris, responding to issues raised about the JV. The statement starts: "Among the accomplishments I am most proud of since becoming Dow's Chairman and Chief Executive Officer since 2005, has been the strong and growing economic relationship between our company and our business partners in Kuwait. ... In recent weeks there has been much discussion and debate about whether a fifth partnership to establish a new joint Kuwaiti-American company -- K-Dow Petrochemicals -- is in the long-term interest of the people of Kuwait," he said. "As the person who often sat at the table while the details of this joint venture were being settled, I know from personal experience that our Kuwaiti partners negotiated with tenacity and resolve to assure the company we were building together would be one that would be worthy of the immense talent and energy Kuwaiti men and women who would become its foundation." The article then goes into some detail explaining that the deal was "thoroughly and fairly negotiated," offers "exceptional value," and will be good to Kuwait. It also includes a list of how Dow has been a generous corporate citizen to Kuwait, and an explanation of the materials that K-Dow will make. The terms of the deal are the focus of much of the report. It certainly seems unusual that Dow's CEO is spending time explaining how PIC's executives got a good deal in their negotiations with Dow. A story on Bloomberg.com today helps to explain Liveris' statement. It notes that a group of Kuwaiti opposition lawmakers calling themselves the Popular Action Bloc is urging Prime Minister Sheikh Nasser al-Mohammed al-Sabah to kill the JV, "saying the investment was ill-timed and doesn't benefit the nation. Kuwait's cabinet yesterday debated whether to proceed with the venture and planned to make a final decision today, the Kuwait Times reported, citing sources it didn't identify." As was the case in the blog item I posted on K-Dow a month ago, I still don't think the K-Dow deal is in danger of falling apart. Chemicals are a cyclical business, and the near-term outlook for joint ventures like this are going to have their ups and downs.