Dow withholds two PS plants from joint venture deal

12 April 2007 14:04  [Source: ICIS news]

By John Baker

 

LONDON (ICIS news)--Dow Chemical is withholding two of its six North American polystyrene (PS) plants from the planned Americas styrenics joint venture with Chevron Phillips Chemical.

 

Nor is it planning to include its 680,000 tonne/year styrene unit in Freeport, Texas, a senior director at Dow has told ICIS news.

 

The two PS units being retained are the 75,000 tonne/year Riverside facility in Pevely, Missouri, and Dow’s largest unit, a 135,000 tonne/year plant in Midland Ohio.

 

Jeff Denton, Dow's product director for PS in North America, said the Riverside unit was being retained as it is a key unit in Dow’s Styrofoam expanded PS business.

 

The Midland site was also being withheld for internal business reasons, but Denton would not expand on this comment.

 

Denton, speaking late on Tuesday, said he expected the joint venture to be confined to the Americas as this was where the greatest synergies were to be found.

 

“The full extent of the deal is captured in North and South America - there is not a bigger deal at the moment,” he said. None of the sites was under threat as a result of the deal, he added.

 

Dow is contributing its 170,000 tonne/year styrene facility in Brazil to the joint venture and six PS plants, four in the US (in Connecticut, Ohio, Illinois and California) and one each in Brazil and Colombia.

 

CPC will contribute its St James, Louisiana, styrene facility, with 950,000 tonnes/year of capacity, and its one US PS facility, in Marietta, Ohio.

 

Overall, the joint venture will have just over 1m tonnes/year of PS capacity, making it a much more balanced operation than the ones the partners currently preside over.

 

The PS business in North America had been under pressure since 2000, said Denton, seeing little or no growth since then and much higher benzene feedstock costs over the last two-three years, with values rising from $1/gal to $3-4/gal.

 

This situation also recently forced NOVA Chemicals and INEOS to combine their North American styrenics operations into the NOVA Innovene joint venture they already operate in Europe.

 

Top North American styrene producers*, ‘000 tonnes/year

Company	Capacity	Market Share, %
NOVA Innovene	1,701	22
Lyondell	1,260	17
Cos-Mar	1,160	15
Dow/CPC	950	12
Sterling Chemical	770	10
Dow Chemical	680	8
Shell Chemicals	455	6

* After NOVA/INEOS and Dow/CPC JVs

Sources: Nexant, ICIS

Top North American PS producers*, ‘000 tonnes/year

Company	Capacity	Market Share, %
NOVA Innovene	910	28
Dow/CPC	760	24
Total Petrochemicals	750	23
Dow Chemical	210	6
BASF	170	5

* After NOVA/INEOS and Dow/CPC JVs

Sources: Nexant, ICIS

 

By: John Baker
+44 20 8652 3214

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