Dow Chemical’s US Gulf coast projects not hit by cutbacks – CEO

24 October 2012 16:23  [Source: ICIS news]

HOUSTON (ICIS)--Dow Chemical’s steps to debottleneck existing capacities and build new plants on the US Gulf coast will go ahead even as the company moves to shut down some plants and cut jobs, the CEO of the US-based chemicals major said on Wednesday.

Dow said this week it plans to eliminate about 2,400 positions and shut down about 20 plants.

“I want to be very clear: we are not abandoning all growth projects,” Andrew Liveris told analysts during Dow’s third-quarter results conference call.

Rather, given the current slow economic environment, Dow will be taking “a more near-term and pragmatic approach” to its investments, Liveris said.

Liveris said that Dow’s restart of a cracker in St Charles, Louisiana, would go ahead as planned by the end of this year.

Furthermore, Dow’s propane dehydrogenation (PDH) project in Texas will not be affected, either, and work is to continue on a planned world-scale ethylene project in Texas. The PDH project is on-track for start-up in 2015, according to Liveris.

“Our US Gulf coast investments are high-return projects that will significantly strengthen Dow’s profitability, lifting margins for downstream businesses such as performance plastics, performance materials, and coatings,” Liveris added.

Further afield, Dow’s Sadara petrochemicals project in Saudi Arabia will not be affected, he said.

Liveris also said that Dow is looking at using the tax-advantaged US "Master Limited Partnership" (MLP) structure as it works on new olefins investments.

“It could be quite favourable to do [MLP] on new projects, we are open, and if this is a genuine mechanism that can apply to us we will deploy it,” he said.

However, Dow will be “dialling back spending in programmes and industries where policy and industry fundamentals have altered the value proposition,” he said.

Liveris pointed in particular to the alternative energy sector.

“We believe that the world of alternative energy is going to dial down, because the world cannot afford alternative energy and subsidies right now,” he said.

By: Stefan Baumgarten
+1 713 525 2653

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