Dow Chemical Co. is increasing its already major investments in U.S. plastics and petrochemicals.
One plastics industry analyst was surprised by the size of the new investments, which join a huge second wave of polyethylene expansion projects spurred by inexpensive U.S. natural gas.
Company officials revealed the new investments May 11 during Dow's annual shareholders' meeting at its headquarters in Midland, Mich. New projects include:
• Construction of a world-scale PE unit with more than 1.3 billion pounds of annual production capacity on the U.S. Gulf Coast. The new PE unit will be based on Dow's proprietary Solution Process technology and will address demand in specialty packaging and industrial and consumer packaging applications.
This investment is in addition to four new PE lines already being installed at Dow's Gulf Coast locations that will add approximately 2 billion pounds of annual production capacity.
• Expanding annual capacity of Dow's new ethylene cracker in Freeport, Texas, to more than 4 billion pounds, making it the world's largest ethylene facility. The cracker will add two furnaces.
• An unspecified series of investments to strengthen Dow's polyurethanes franchise. These investments will be aimed at driving downstream specialty polyols and systems growth.
• Increasing PE capacity by almost 800 million pounds — primarily in North America — through a series of incremental debottleneck projects.
• Construction of a world-scale polyolefins facility in Europe with annual capacity of almost 1 billion pounds. This addition will maximize Dow's ethylene integration in the region and will serve growing demand for high-performance pressure pipes and fittings, as well as caps and closures.
• Enhancing its Pack Studios global network of packaging experts, equipment and testing capabilities that encourages collaboration to develop better packaging. Over the next two years, Dow will drive several advancements in the U.S. and globally in PE and adhesive innovations and rapid prototyping.
• Investing an additional $400 million in Midland to integrate Dow and Dow Corning's manufacturing operations.
• A new, $100 million innovation center in Midland. The center will house scientists and engineers who will focus research and development activities for home and personal care products. They will work to broaden Dow's energy-saving building technologies; enhance materials for infrastructure; and drive closer partnerships with automakers as they accelerate efforts to light-weight automobiles.
Polyolefins market analyst Robert Bauman said he was surprised by the scope of Dow's announcements, especially in PE resin.