New York — With Dow Chemical soon to be its own company again, new leader Jim Fitterling is clear on the role that its Packaging & Specialty Plastics unit will play.
That unit “is our franchise,” Fitterling said Nov. 7 at a press event before Dow's investor day event in New York. “It's the fastest growing and most profitable business in our portfolio, and we expect it to continue in this trend.”
Packaging & Specialty Plastics — including one of the world's largest polyethylene resin businesses — rang up sales of around $16 billion in 2017. That amount is more than one-third of the $45 billion generated last year by businesses that will make up the new Dow when it separates from DowDuPont Inc. on April 1.
The two iconic plastics and chemicals firms had merged in 2017, but now will split into three separate companies: a new Dow, a new DuPont and Corteva, a firm that will include former agricultural businesses of Dow and DuPont. In addition to PE and elastomers within Packaging & Specialty Plastics, other Dow units include polyurethanes and silicones.
Dow will continue to be based in Midland, Mich., but there will be some changes when compared to Dow's previous identity. The new firm will have six businesses instead of 15-plus and will serve only three market sectors — packaging, infrastructure and consumer solutions — instead of more than 10. Its expected headcount of 37,000 global employees also is 19,000 less than its prior total.
Near-term priorities for Fitterling as CEO include profitable growth, disciplined capital allocations, a low-cost operating model and a best-owner mindset. New Dow President and Chief Financial Officer Howard Ungerleider added Nov. 7 that Dow will focus on maximizing shareholder returns while minimizing risk.
Fitterling joined Dow in 1984 and worked in sales, marketing and supply chain positions before assuming a variety of leadership roles. His plastics experience within Dow includes time spent as business vice president for polyethylene and president of basic plastics. Fitterling in March was named successor to longtime Dow CEO Andrew Liveris.
Ungerleider started at Dow in 1990 and has held different leadership roles in commercial, business and financial functions. His plastics experience includes work with for several of Dow's specialty polyolefin brands, business director for wire and cable compounds and North American commercial vice president for basic plastics.
Like many resin firms, Dow has used ample ample supplies of North American shale gas to expand its PE resin and ethylene feedstock operations on the U.S. Gulf Coast. Fitterling said that additional capacity additions for a range of products could take place both in the U.S. and at other Dow global sites in the 2021-23 time frame. He added that these likely would be smaller additions via debottlenecking, rather than a larger project such as building a new petrochemical cracker.
Fitterling also addressed recent challenges to the public image of plastics because of issues ranging from marine debris to a lack of recycling infrastructure.
“Plastics are still the lightest weight product available,” he said. “Every other competing material has four times the environmental footprint of plastics. Plastics allow you to reduce weight by half while doubling strength.”
“Banning plastics won't solve the [pollution] problem. What will solve the problem are great circular economy projects.”
“The top 20 global resin makers are tackling this problem,” Fitterling added. “I'm highly confident we'll be able to do that.”