Dow picks Texas, Louisiana sites for plastics capacity expansions

27 August 2013 21:25  [Source: ICIS news]

Dow picks Texas, Louisiana sites for plastics capacity expansionsHOUSTON (ICIS)--Dow Chemical has selected sites in Texas and Louisiana for its earlier announced investments in additional performance plastics capacity, the US-based global producer announced on Tuesday.

Construction on the projects is expected to begin soon, and the capacity increases should generate about $2.5bn (€1.9bn) in earnings before interest, tax, depreciation and amortisation (EBITDA), the company said.

Dow has decided to expand its high melt index (HMI) Affinity brand polymer franchise at its site in Freeport, Texas. Affinity is designed to deliver stronger bonding in hot melt packaging adhesives, the company said.

The company also will expand its Elite polymer franchise, which Dow said delivers enhanced durability and flexibility for food packaging, hygiene and medical applications, and industrial and consumer packaging markets.

Texas Governor Rick Perry said the Freeport expansion will create 96 jobs and be a “multimillion dollar capital investment”.

In Plaquemine, Louisiana, Dow intends to build two polyolefins plants to aid in the expansion of its Nordel metallocene ethylene-propylene-diene monomer (EPDM) franchise with next-generation technology. Nordel products are highly flexible polymers that are heat and chemical resistant and are used in the infrastructure, automotive and consumer durables markets, among others, the company said.

Also, Dow plans to expand its low density polyethylene (LDPE) family of polymers such as Agility for applications in flexible food packaging.

Dow is investing about $1bn and creating 71 new direct jobs with the Plaquemine expansions, Louisiana Governor Bobby Jindal said. Construction on the plants should begin by the end of 2013, with completion of the entire Plaquemine expansion project expected near the end of 2016, the governor added.

Specific nameplate numbers in regard to the capacity increases from the Texas and Louisiana projects were not disclosed.

“Dow Performance Plastics is the world’s leading plastics franchise, and with these expansions Dow will be able to further leverage our cost-advantaged position and [research and development] expertise to deliver leading edge technology that provides a competitive benefit to our customers in many of our most strategic markets,” said Jim Fitterling, executive vice president for Dow. “Our history on the US Gulf coast reaches back more than 70 years, and we’re proud to continue our commitment to this important region with these strategic and accretive investments."

In March, Dow announced it was scouting locations for the expansions and had begun front end engineering and design (FEED).

Dow has committed to spending $4bn on the Gulf coast to take advantage of the shale gas boom. Its planned 1.5m tonne/year ethylene plant for the Freeport site is expected to start up in 2017. The company’s 750,000 tonne/year propane dehydrogenation (PDH) plant at the same site is expected to come on line in 2015.

($1 = €0.75)

By: Jeremy Pafford
+1 713 525 2653

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