Dow seeks partners for US ethylene derivative units – CEO, execs

03 December 2012 21:39  [Source: ICIS news]

NEW YORK (ICIS)--US-based Dow Chemical will seek partners for downstream units at its planned 1.5m tonne/year US Gulf coast cracker in Freeport, Texas, senior executives said on Monday.

“Around 1.1m tonnes of that ethylene capacity will be for our high-value derivatives, while for the rest we are looking for partnerships,” said Dow chief financial officer Bill Weideman at Dow’s investor day annual meeting.

Dow is choosing to build a larger cracker - going beyond its own internal needs - to achieve better economies of scale, noted chairman, president and CEO Andrew Liveris.

“By up-scaling the cracker, we get a deal and they get a deal,” he said, referring to potential partners.

“They would benefit from our infrastructure advantage and have a safe haven with our operational skills,” Liveris added.

Executive vice president Jim Fitterling compared the partnership concept with its existing Dow Mitsui Chlor-alkali joint venture. The venture’s 800,000 tonne/year chlor-alkali facility in Freeport, Texas, is set to start-up in mid-2013.

“Here we had no interest in making EDC [ethylene dichloride] used for PVC [polyvinyl chloride] production, but our partner Mitsui did. And so they will benefit from the EDC, while we benefit on the chlorine side,” said Fitterling.

Dow will take its share of the 50:50 joint venture’s chlorine for internal use, while producing EDC with Mitsui’s share of the chlorine for Mitsui to market worldwide.

At Dow’s new cracker site, “we will load it with technologies and high-end PE [polyethylene] and elastomers such as INFUSE olefin block copolymers”, said Fitterling.

“These high value-add products will be used in hygiene, medical, and wire and cable applications,” he added.

By: Joseph Chang
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