INTERVIEW: New Dow unit to create platforms

20 July 2007 21:00  [Source: ICIS news]

By Joseph Chang

NEW YORK (ICIS news)--One of Dow Chemical's newest units will create a number of specialised platforms, each catering to the unique needs of customers in diverse industries, a senior executive said on Friday.

The unit, Dow Wolff Cellulosics,  was created on 1 July after Dow’s €540m ($740m) acquisition of Wolff Walsrode from Bayer. Wolff contributed about $400m in sales.

On a pro forma basis, Dow Wolf Cellulosics had over $1bn in sales in 2006 and 2,200 employees.

“We will have our business organised around market-facing platforms, where we implement a customer-intimate model,” said Martin Sonntag, general manager of , in an interview with ICIS. “Those platforms will have everything that they need to be successful in the market.”

The new platforms will include construction, paint, personal care, pharmaceuticals, food and general industrial specialties, he said.

“Our strength is that we are market-focused and customer-intimate,” said Sonntag. “We have customer-centric behaviour in our DNA.”

Dow’s cellulosics business was focused on pharmaceuticals and food, while Wolff Walsrode had strength in construction and paints.

“This is a very complementary merger where Dow has strengths in areas where Wolff was not as strong in and vice versa,” Sonntag said. “So, when we combine the two, we have a much broader reach to the market with leading positions.”

While there will be some cost synergies, Sonntag said the goal of the merger was to boost top-line growth.

“This acquisition is about growing the company - not buying market share and then optimising how we run it,” he said.

“This is about two strong partners joining together to build a new platform to boost growth rates higher than what the two could have achieved on their own,” Sonntag said.

Cellulosics and derivatives, produced from renewable raw materials such as wood pulp and cotton, are used in a wide variety of consumer and industrial products. Applications include masonry mortars, additives for juices and dairy products, and coatings for drug tablets.

($1 = €0.72)

By: Joseph Chang
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