02 December 2013 18:34 [Source: ICIS news]
HOUSTON (ICIS)--Dow Chemical will maintain the integration benefits it enjoys as a chlorine producer for its downstream polyurethane (PU) and agricultural-chemical businesses after it carves out its chlor-alkali segments, a spokeswoman said on Monday.
The company did not specify the details, but it expects to complete the deals in the next 12-24 months.
The epoxy resins and chlorinated organics businesses had received the bulk of Dow's chlorine production, said spokeswoman Rebecca Bentley. In fact, Dow's chlorine needs will fall by 70% once one considers the carve-outs and the capacity reductions that the company has announced in the last 10 years.
Nonetheless, Dow will still need chlorine for its polyurethanes and agricultural-chemical businesses, Bentley said. These chlorine needs were among the reasons why the carve-out was so complex.
Dow will establish chlorine supply and purchase agreements similar to those it made with the 2010 sale of Styron, its styrenics business, Bentley said.
Dow sold Styron to Bain Capital for $1.63bn (€1.21bn).
Dow did not give an estimated value for the chlorine and epoxy resins carve-out.
The carve-out represents up to $5bn of the company's total revenue. It includes approximately 40 manufacturing facilities at 11 sites and almost 2,000 employees.
Assets that are part of Dow’s carve-out include its chlor-alkali and chlor-vinyl facilities in Plaquemine, Louisiana, and Freeport, Texas, including the group’s interest in the Dow Mitsui chlor-alkali joint venture in Freeport.
It also includes Dow’s global chlorinated organics plants in Freeport and Plaquemine as well as in Stade, Germany.
The epoxy resins assets include units at Freeport and Roberta, Georgia, in the US; Rheinmuenster, Baltringen and Stade in Germany; Pisticci, Italy; Gumi, South Korea; Zhangjiagang, China; and at Guaruja in Brazil.
Options to sell the group’s brine and select assets, which support operations in Freeport and Plaquemine and energy operations in Plaquemine, will also be explored.
In addition to the carve-out, Dow is shutting down about 800,000 tonnes/year of chlorine and caustic soda equivalent capacity in Freeport.
The capacity being shut down will be replaced with supply from the new plants that are coming on line with the start-up of the Dow Mitsui joint venture in early 2014.
Additional reporting by Franco Capaldo
($1 = €0.74)
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