Dow Chemical Co.'s plastics-related business units posted mixed results in 2016.
Full-year sales for the Performance Plastics unit — including polyethylene and specialty plastics — of Midland, Mich.-based Dow were flat at $18.4 billion. The firm's Performance Materials & Chemicals unit — including polyurethane — saw sales fall 23 percent vs. 2015 to just over $9.2 billion.
Measured on earnings before interest, taxes, debt and amortization (EBITDA), Performance Plastics slipped almost 17 percent to $4.5 billion, while Performance Materials & Chemicals plummeted 97 percent to $134 million.
Based on sales, they were the two largest of Dow's five operating units in 2016, combining for more than 55 percent of the firm's total sales. On a pounds basis, Performance Plastics' sales volume grew 8 percent in 2016, while Performance Materials & Chemicals slid 14 percent.
Selling prices for materials made by Performance Plastics fell 8 percent during 2016, with Performance Materials & Chemicals down 9 percent in that category.
Dow's overall company sales for 2016 fell more than 1 percent to around $48.2 billion. The firm's annual profit slumped 43 percent to $4.4 billion.
In a Jan. 26 news release, Dow officials said that Performance Plastics posted fourth-quarter growth in all business segments except electrical and telecommunications. In Performance Materials & Chemicals, PU sales volume grew year-over-year for the 15th consecutive quarter, they added.
In the release, Dow Chairman and CEO Andrew Liveris said that the firm “is seeing early signs of positive economic momentum, with the United States in expansionary mode.” These signs, he added, “are driven by the ongoing strength of the consumer and the tailwind of a new incoming administration promising structural reforms.”
Dow's growth plans for 2017 include a massive expansion of PE capacity at its petrochemicals complex in Freeport, Texas.
Dow's pending merger with Wilmington, Del.-based DuPont Co. — another global plastics and chemicals giant — is expected to be completed in the first half of 2017. The combined firm then plans to split into three separate publicly traded companies, including one focused on materials, within two years of the completion date.
On Wall Street, Dow's per-share stock price began 2016 around $51.70 and had climbed to $58.40 by the end of the year, for an increase of 13 percent. It had risen further to $61.30 in early trading Jan. 26.