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March 30, 2015 02:00 AM

Dow Chemical sees potential for PE growth in packaging

Frank Esposito
Senior Staff Reporter
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    Dow Chemical Co.
    Dow launched its Retain brand polymer modifiers last year. The company said Retain makes it easier to recycle films.

    ORLANDO, FLA. — The packaging market continues to provide growth for the polyethylene business of Dow Chemical Co. — which is a good thing, since the firm will bring on more than 2 billion pounds of new PE and specialty plastics capacity in 2017.

    “We're seeing more material conversions going from paperboard to [PE] pouches,” Dow executive Greg Jozwiak said at NPE 2015 in Orlando. “Some beverages are going from corrugated trays to high-print shrink film.”

    Jozwiak serves as commercial vice president of North American packaging and specialty plastics for Midland, Mich.-based Dow, which ranks as one of the world's largest PE makers.

    Packaging applications in some developing countries are going right into flexible packaging without ever using cans or boxes, packaging and specialty plastics business president Diego Donoso added. “You go to these places and you see oceans of stand-up pouches,” he said.

    In Freeport, Texas, Dow will add more than 2 billion pounds of capacity for Elite-brand enhanced polyethylene and Affinity-brand polyolefin plastomers, with a start date set for 2017. The firm is investing a total of $4 billion in numerous Gulf Coast projects. The moves are part of a wave of North American PE and ethylene feedstock expansions that are tied to newfound supplies of natural gas in the region.

    “We're investing for the long-term — 15, 20, 30 years,” Donoso said. “And we need the new capacity because we're getting close to a sold-out position.”

    He added that lower oil prices might not have as big an impact on Dow's business as some might be expecting. Natural gas is used as the basis of most North American and Middle Eastern PE, but the material's pricing tends to directionally follow markets for oil, which is used as a primary PE predecessor in other parts of the world.

    “Oil is a distraction,” Donoso explained. “It hasn't created good visibility to the value chain. Supply and demand should dictate what polyethylene prices are.”

    Jozwiak added that lower gasoline prices might spur consumer activity and consumption of PE-based products. “There's a segment of the population that hasn't seen wage appreciation, so having another $15 or $20 in their pockets means a lot,” he said.

    In addition to its Freeport project, Dow later this year will begin production with Sadara, its joint venture project with state-owned Saudi Aramco in Jubail, Saudi Arabia. The site eventually will have almost 7 billion pounds of annual capacities for PE, polyurethanes, elastomers and related products.

    Dow at NPE 2015 also was focused on its Retain-brand polymer modifiers, which it launched late last year. The materials make it easier to recycle post-industrial barrier films without compromising performance or aesthetics.

    Another NPE 2015 highlight for Dow was the use of its PE and PU technologies in artificial turf for field hockey competitions during the Rio 2016 Olympic Games at the Deodoro Olympic Park.

    Dow is working once again with Polytan STI, a global leading manufacturer and supplier for outdoor and indoor sports surfaces, to deliver a higher-performing, more reliable and faster artificial turf. Dow and Polytan worked together on London 2012's Riverbank Arena field hockey site.

    In 2014, Dow posted sales of almost $58.2 billion, up almost 2 percent vs. 2013. Plastics-related business units generated almost two-thirds of Dow's sales in 2014. Its performance plastics unit — including PE — saw sales grow more than two percent to $22.4 billion. Dow's performance materials & chemicals unit — including PU and epoxy — posted sales growth of 2 percent to $15.1 billion.

    Dow employs 53,000 at 201 sites worldwide.

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