Dow strikes styrenics JV with Chevron Phillips

10 April 2007 14:37  [Source: ICIS news]

LONDON (ICIS news)--Dow Chemical will create its long awaited commodity styrenics joint venture with Chevron Phillips Chemical, the companies said on Tuesday, although it will be limited to the Americas.

Dow said in January that it was close to concluding what it likes to call an “asset light” joint venture in commodity styrenics , a business which for all players has been plagued with overcapacity and volatile and high feedstock benzene prices.

A number of potential partners were linked to a possible deal, which was expected to be more global in nature, including India’s Reliance Industries and producers with upstream styrene capabilities in the Middle East.

A Dow spokesman said on Tuesday said that the company continued to look at opportunities to strengthen its polystyrene (PS) businesses elsewhere.

The 50:50 joint ventures with Chevron Phillips Chemical will include polystyrene and styrene assets from both firms located in North and South America.

Subject to regulatory approval Dow will contribute a styrene monomer plant at Camacari, Brazil and polystyrene plants at Gales Ferry, Connecticut; Ironton, Ohio; Joliet, Illinois; Torrance, California; Cartagena, Colombia; and Guaruja, Brazil.

Chevron Phillips Chemical intends to contribute a styrene monomer plant at St James, Louisiana and a polystyrene plant at Marietta, Ohio.

"This joint venture is what our asset light strategy is all about joining forces with a complementary partner who brings value to Dow through its excellent feedstock position and with whom we can build a stronger regional presence, reduce costs, enhance innovation and deliver a superior service to our customers," Dow chief executive Andrew Liveris, said.

"This joint venture is an important step for our company in recognising the changing competitive landscape for styrenics in the Americas," said Ray Wilcox, president and chief executive officer of Chevron Phillips Chemical.

The companies said in a statement that they expected the joint venture to realise significant manufacturing, commercial and feedstock synergies.

Chevron Phillips Chemical has styrenics plants in the Americas and North East Asia but is adding significant joint venture benzene and styrene capacity in Saudi Arabia. It is believed to be considering adding PS capacity also in Saudi Arabia.

By: Nigel Davis
+44 20 8652 3214

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