Dow unveils $4bn of new capacity investment to 2022
Tom Brown
11-May-2017
LONDON (ICIS)–Dow is to invest in an expansion to its
recently completed Texas cracker and develop flagship new
polyethylene and polyolefin capacities in the US and Europe
as part of a five-year investment campaign, the
US-headquartered chemicals firm said on Thursday.
The raft of new growth capital expenditure is expected to
cost around $4bn, with the bulk of investments intended to
capitalise on the competitive advantage offered by the
proliferation of cheap US feedstocks, according to Dow CEO
Andrew Liveris.
Dow is to ramp up capacity at its new TX-9 ethylene cracker
in Freeport, Texas, to 2m tonnes/year, making it the largest
unit in the world. The company completed construction of the
unit in late March this year with a nameplate capacity of
1.5m tonnes/year.
The company is also planning construction of a 600,000
tonne/year polyethylene (PE) unit on the US Gulf Coast, and a
450,000 tonne/year polyolefins facility in Europe.
A series of investments to strengthen its polyurethanes value
chain is also planned, with an eye to increasing specialty
polyols growth, as well as a series of debottlenecking
projects across its asset base to free up an additional
350,000 tonnes/year of PE capacity.
The majority of additional PE capacity will be in North
America, Dow added.
The company is to license technology developed by subsidiary
Univation to develop a new catalyst unit, as well exploring
additional investments to enhance feedstock flexibility in
the US, the company added.
The new units are expected to begin coming on stream in 2020,
and bring Dow’s US growth investments to $12bn over a 10-year
period.
“Manufacturing plays a vital role in driving economic growth
and prosperity across virtually all sectors of society,”
Liveris said.
“The positive investment environment in the US chemical and
materials sector, driven by competitive feedstocks and a
skilled workforce, is a driver for Dow to further invest in
the US,” he added.
Dow’s Midland, US, headquarters also stand to benefit from an
additional $500m investment to allow greater synergies from
the integration of subsidiary Dow Corning’s manufacturing
operations with those of its parent, and the development of a
new innovation centre in the city.
Liveris had hinted at additional investments late last month
at an investor day, stating that the company may pursue some
incremental investments following major projects like the
construction of the TX-9 cracker.
The company may also be eyeing opportunities to drive the
growth of performance chemicals at US neighbour DuPont once
the anticipated merger closes later this year, according to
CFO Jim Fitterling.
“As soon as we can close on the Dow/DuPont deal, we’ll want
to bring them in on that discussion and understand how we can
bolt on some growth capacity for DuPont performance
materials,” Fitterling said in April.
Image: Dow’s plant in Freeport, Texas, uses ethane to make ethylene, which is the feedstock for polyethylene (PE). (Dow Chemical)
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