30 July 2008 17:16 [Source: ICIS news]
Correction: In the ICIS news story headlined "Dow evaluates realignment for PIC JV" dated 30 July 2008, please read the headline as "Dow evaluates PC units for PIC JV". Also, in the first paragraph and throughout please read ...George Biltz.... instead of ...George Blitz... A corrected story follows.
By Nigel Davis
LONDON (ICIS news)--Dow is still evaluating how it will realign its polycarbonate and compounds and blends businesses within the K-Dow joint venture with Kuwait’s PIC, head of Dow Portfolio Optimization (DPO) George Biltz said on Wednesday.
Polycarbonate and compounds and blends have been part of DPO since February this year, with Biltz’s team charged with accelerating the evaluation of the assets and business within these product lines.
The $11bn (€7bn) K-Dow venture, which will include most of Dow’s commodity plastics and some upstream olefins assets, is likely to be finalised in the fourth quarter. Dow personnel are working towards a 1 October deadline.
DPO is working across the entire Dow portfolio to help accelerate the transformation towards a more end-use market or customer-focused business model.
“Within any organisation, systematic portfolio management is fundamental to a company’s evolution and sits right at the heart of long-term shareholder value creation,” Dow CEO Andrew Liveris said when DPO was created.
“Our newly created portfolio brings this highly important activity squarely into the spotlight ensuring that we drive it forward with discipline, with diligence and due speed,” he added.
Biltz was head of Dow's Specialty Plastics and Elastomers portfolio and since taking charge at DPO he and his small team have helped finalise the divestment of two Houston-based Haltermann businesses to Monument Chemicals; the sale of Saran monolayer films to an unnamed company; and the divestment of a polystyrene pipe insulation business to ITW.
DPO has also overseen the creation of Dow Elastomers, one of the chemicals giant's more market-facing businesses.
Carving out Dow’s polycarbonate assets, including joint ventures, and realigning compounds and blends is on-going work, Biltz told ICIS news.
DPO is charged with accelerating the Dow transformation process which has speeded up remarkably within a few months following the announcement of the creation of the PIC commodities joint venture and the acquisition of specialties maker Rohm and Haas.
“There is a very large Dow transformation underway,” Biltz said, stressing that the questions being asked Dow-wide are where and how the company participates in its many and varied product lines.
“Part of our job it to accelerate things,” Biltz said, with the DPO remit being to help the company decide which business fits in which part of the portfolio and whether it might be preferable to seek joint venture partners or pursue divestment for certain product lines.
The more customer-facing elastomers business group was created in January and since then Tyrin chlorinated polyethylene and the co-polymer of acrylic acid, Amplify, have been added to the elastomers portfolio.
“There is no silver bullet for these pieces,” Biltz said. “They can all fit together differently. Our goal is to cause a different level of focus and speed.”
Biltz sees the DPO role as helping to provide a broader context for the evaluation of a particularly business within the wider Dow portfolio without disrupting on-going operations. The aim is to change the business model to be more solutions rather than process based.
“We are a company clearly on the move,” said Biltz. “You have to find a way to make all that business grow.”
One of the next big challenges for DPO will be to ascertain how the vinyl acetate monomer (VAM) consuming businesses of Rohm and Haas align with Dow’s VAM assets, he said.
“The challenge Dow has is that it is a very dynamic company. How do you focus that?” he said.
One answer, he believes, is through portfolio discipline and accelerated transformation.
($1 = €0.64)
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