DowDuPont Inc.'s Dow polyurethanes business is on the hunt for systems houses that fit with its strategy in higher added value markets segments, said Jon Penrice, vice president Dow polyurethanes, at UTECH Europe 2018, Maastricht, Netherlands.
Penrice, speaking on the sidelines of the meeting said: "We have gone through a strategic review. We are actively looking for M&A."
"We want to pick up the pace again. It's a good strategy, we took a rain check on it," he said. "We would like to grow our systems business at close to double digit, 8-10 percent is our projected rate.
"Acquisitions give us channels to market as well as speed," he said. "We are interested in acquiring technology positions in the CASE area and composites and in rigids."
Dow sees complete systems as a way of moving up closer to an adhesives customer in the supply chain.
"Dow is a large company in the adhesive sector, but as a raw material supplier. Dow is interested in industrial and construction adhesives," Penrice said. "Elastomers, small customers high technology and higher than usual P/E margins."
He expressed interest in a growing footwear market that is moving production out of Asia.
Composites is the final area of interest.
"It's fairly small, compared to unsaturated polyester resins, but processability and performance are there. Polyurethanes sit in the gap where it is more processable than epoxy and higher performance than polyester. We're seeing much higher growth rates in composites in automotive and industrial applications.
"There are small companies that lack scale but have global ambition, we can give them global growth and expansion."
Acquisitions could also expand to include joint ventures and marketing alliances.
"We are not dogmatic," he said. "We want the entrepreneur to have skin in the game and to want to continue, but we can help scale, and they can grow much faster with us, or they can cash out."