US Dow plastics unit draws interest, deal may arise in 12-18 months

28 October 2010 20:35  [Source: ICIS news]

Dow CEO Andrew LiverisHOUSTON (ICIS)--The basic plastics business of US major Dow Chemical is attracting interest, and a new deal may arise in the next 12-18 months, chief executive Andrew Liveris said on Thursday.

Any deal would be different from the company's failed K-Dow joint venture, Dow said.

The plastics business has become much more profitable since the K-Dow deal, both because of advantaged ethane feedstock in the US and because of divestitures and shutdowns.

As a result of the divestments and shutdowns, the basic plastics business fits the company's performance mix much better than before, Liveris said during an earnings conference call.

"There is a higher value for those assets, clearly," Liveris said.

"We are a different plastics portfolio, a lot more focused," he continued. "It divides itself pretty nicely between the high-end, high-value plastics - specialty plastics if you like - that go into growth markets … and more commodity-like plastics," he said.

"We are looking at doing a different type of deal than K-Dow in the future, but we will do deals nevertheless," Liveris said. "We anticipate that will all be in the next 12-18 months."

Dow came close to establishing a plastics joint venture in 2007, when it and Petrochemical Industries Co (PIC) of Kuwait agreed to create a $17.4bn (€13.2bn) joint venture

The so-called K-Dow joint venture with PIC fell apart at the end of 2008.

($1= €0.73)

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By: Al Greenwood
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