NEW YORK (Dec. 4, 12:25 p.m. ET) — Challenges facing Dow Chemical Co. and other global plastics and chemicals firms were on full display at a media event hosted by the firm on Dec. 3 in New York.
At the event — which preceded Dow's 2012 Investor Forum — Dow Chairman and CEO Andrew Liveris professed optimism about the North American economy, while at the same time confirming that the firm would divest businesses with $1 billion in annual revenue over the next 12 months.
Liveris offered no details of those divestments. In late October, Midland, Mich.-based Dow announced it would close about 20 plants worldwide and eliminate 2,400 jobs. Those cuts will include plastics materials plants in Belgium and Japan.
That announcement came only six months after Dow confirmed it would cut 900 jobs worldwide by closing four plants that made expanded polystyrene foam and polyurethane feedstocks.
Like many global firms, Dow is struggling with a weak European economy and slowing growth in Asia. But Liveris singled out the U.S. market as “a bright spot” for Dow.
The North American automotive and construction markets “both should be up” in 2013, he said, adding that the U.S. “is moving into territory that could lead the world out of a two to two and a half percent GDP growth level.”
Regarding Dow's plans to build a massive plant making plastic feedstock ethylene in Freeport, Texas, Liveris said that the project “is moving ahead and is going through the permitting process.”
He stopped short, however, at saying if the project — set to open in 2017 — would include new polyethylene resin capacity.
“We're looking at offers and deciding what makes the best sense,” Liveris said. “We could have large contracts to base-load someone else, but we're not sure if that's going to be for commodity polyethylene or not.”
Through the first nine months of 2012, Dow's sales fell almost 7 percent to just under $43 billion. The firm's profit slid almost 32 percent to less than $1.9 billion. Dow generated about half of its nine-month sales from plastics-related businesses.