Dow Chemical Co. has rearranged its plastics businesses putting them all under one roof and has placed former plastics executive Howard Ungerleider in charge of those assets.
Previously, Dow's plastics businesses, including polyethylene, had been scattered among two or more business units at the Midland, Mich.-based firm. Now, all will be included in a newly formed Performance Plastics division, officials said in a March 1 news release.
The new division's formation reflects Dow's active portfolio management over the last two years, resulting in a de-emphasis of commodity plastics.
Performance Plastics will have a technology [and] market-driven approach to intensely focus on downstream markets such as packaging, health and hygiene and food applications, corporate Chairman and CEO Andrew Liveris said in the release.
Ungerleider, who was Dow's commercial vice president of plastics from 2006-08, is president of the new division. The 21-year Dow veteran has been named a senior vice president of the firm as well. Most recently, he had been Dow's vice president for investor relations.
Dow Executive Vice President Jim Fitterling, another former plastics executive, also has seen his role expanded at the firm. Fitterling, a 27-year Dow veteran will retain his leadership spot in the hydrocarbons unit and also will assume responsibility for corporate strategy development for Dow's Executive Leadership Committee. The ELC is composed of 14 senior leaders at the firm.
Performance Plastics will incorporate Dow's previous plastics unit, including polyethylene, polypropylene and specialty elastomers. It also will cover finished film and wire and cable products, along with well-known materials like Saran-brand polyvinyl dichloride. Some products acquired in Dow's 2009 purchase of specialty chemicals maker Rohm and Haas films, adhesives and functional polymers will be added; as will Dow's efforts in bioplastics, such as the sugar cane-based plant it is developing in Brazil.
The previous plastics business unit saw its 2010 sales climb 16 percent to almost $11.6 billion, with pretax profit soaring 75 percent to $2.9 billion. Plastics was Dow's largest unit in 2010, based on both sales and pretax profit.
However, the new Performance Plastics unit will not include plastics-related items such as polyurethanes, epoxy and emulsion polymers, which will remain in Dow's Performance Products unit.
Plastics and Performance Products accounted for almost 42 percent of Dow's total sales in 2010 and nearly 50 percent of pretax profit, before corporate eliminations. No sales estimate or employee total for the new Performance Plastics unit was available.
In the short-term, it will all be business as usual, spokesman Greg Baldwin said March 1 by phone. In summarizing Dow's recent approach to its plastics businesses, Baldwin said the firm has been divesting lower-margin business, and now is holding on to the high-value ones and putting them all together.