The new Dow Chemical will look familiar to customers when the name returns early next year.
DowDuPont Inc. — formed in September from the merger of industry icons Dow and DuPont Co. — is creating three separate publicly held spinoffs, including a materials-focused Dow Chemical.
"We took the opportunity to combine legacy Dow businesses and elastomers with ethylene copolymers from DuPont," DowDuPont packaging and specialty plastics consumer vice president Mark Saurin said in a recent interview. "Those materials work well with packaging as well as with consumer goods and transportation."
"There's good synergy there, and it will give us the capability to have technology in different areas," he added. "There's some good overlap in packaging, footwear and industrial that will give us great growth potential as we go forward."
The spinoffs are expected to be complete by the end of the first quarter of 2019. DowDuPont officials announced in February that its materials spinoff will operate under the Dow name, while its specialty products division will be the new DuPont. The chemicals giant added that its agriculture division will be named Corteva Agriscience.
The new Dow will be the largest of the three spinoffs, with projected annual sales of more than $50 billion, and will retain the Dow diamond as its brand. The company said while certain product names would change at separation, many products within each intended company would continue to be sold under their current, widely known brand names.
The re-established Dow, like its previous incarnation, will be based in Midland, Mich. It also will be looking to market large amounts of new polyethylene resin capacity. Dow and many other resin firms are adding PE capacity to take advantage of ample supplies of shale gas feedstock in Northr America.
"We're very positive about the industry outlook, with a new PE train in Texas, additions in elastomers and further expansion in ethylene copolymers," Saurin said.
The projects that Saurin was referring to include the September startup of a specialty PE resin unit in Freeport, Texas. The new unit will have annual production of almost 900 million pounds of Elite-brand enhanced PE. Other plastics-related projects underway for 2018, including the additions of:
• 440 million pounds of capacity for Next Generation Nordel-brand metallocene EPDM for higher-margin applications.
• 275 million pounds of bi-modal gas phase PE via a debottlenecking to produce more material for high-performance pipe and fitting applications.
• 700 million pounds of high melt index polyolefin elastomers for high-performance flexible packaging, transportation and consumer markets.
Regarding the PE market, Saurin added that "if you look globally, there's good growth potential that would require three or four new mega-projects every year, so you need a strong rate of new [PE] supply."
"There are high growth rates in India and China, so, based on global dynamics, we'll supply the product where it's needed," he said. "And there's still demand for high-quality [PE] product in North America."
Saurin added that Dow sold out all four PE production lines at its Sadara joint venture in Saudi Arabia "very quickly" when it opened in 2017.
Even as Dow is preparing for growth, it's aware of challenges facing the global image of plastics, as plastic ocean waste and possible elimination of single-use plastics have caught the public's attention.
"There's a great deal of frustration but also excitement about the image of plastics," Saurin said. "Our message about the benefits of plastics packaging isn't being heard."
In working on this issue, Dow is part of the Hefty EnergyBag program that's offering $100,000 in grants to help promote recovery of difficult-to-recycle plastics. The program is designed to help establish local Hefty EnergyBag programs in communities and to divert those plastics from landfill disposal.
"It's a question of how can we help and do more to explain those benefits and increase recognition of recycling and of limiting marine debris," he added.
Saurin and other Dow officials sound like they're embracing the challenge of new markets and opportunities for a new company that's 121 years old.
"Sentiment is extremely positive and the outlook is very strong," he said. "We have a clear growth plan for the future."