Price and market trends: Dow targets 2017 for Louisiana and Texas polymers expansions

06 September 2013 09:56  [Source: ICB]

The company plans to build two polyolefins plants in Louisiana in addition to its Texas expansions

US-based Dow Chemical has selected sites in Texas and Louisiana for its earlier-announced investments in extra performance plastics capacity, with both expansion projects scheduled to be fully operational by 2017.

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


 Fitterling: aims to provide a competitive benefit to customers

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

It also will expand its Elite polyethylene (PE) polymer franchise, which Dow said delivers enhanced durability and flexibility for food packaging, hygiene and medical applications, and industrial and consumer packaging markets.

The Freeport expansion will consume available capacity from Dow's planned 1.5m tonne/year ethylene production facility at the site, the US producer said.

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, he said.

The Plaquemine plants will use ethylene produced from Dow's actions to improve ethane feedstock flexibility and increase ethylene supply at the site by 2015, the company said.

Specific nameplate numbers in regard to the capacity increases from the Texas and Louisiana projects were not disclosed. But the total derivative capacity from the performance-plastics units is expected to be about 1m tonnes/year when the plants are fully operational in 2017, said Dow spokesperson Kelly Chandler.

Jim Fitterling, executive vice president for Dow, said: "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 [R&D] expertise to deliver leading-edge technology that provides a competitive benefit to our customers in many of our most strategic markets."

In March, Dow said 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.

The company's planned 1.5m tonne/year ethylene plant for the Freeport site is expected to start up in 2017.

By: Jeremy Pafford
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