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Dow Chemical announced plans to build several plastics facilities on the U.S. Gulf Coast to take advantage of cost-advantaged feedstocks available from increasing supplies of shale gas in North America.The new capacity will target demand in North and South America, in addition to select export opportunities. Dow is currently exploring specific location options on the U.S. Gulf Coast, with final investment locations to be determined at a later date.

PlasticsToday Staff

March 18, 2013

2 Min Read
Dow Chemical to build plastics facilities on U.S. Gulf Coast

The production units include Dow's ELITE enhanced polyethylene for flexible packaging and hygiene & medical applications; specialty low-density polyethylene (LDPE) to serve the packaging and electrical & telecommunications market segments; high melt index (HMI) elastomers for Dow's AFFINITY brand of hot melt adhesives; and metallocene-based ethylene propylene diene monomer (EPDM) for transportation, infrastructure, electrical & telecommunications.

These new units will utilize building block materials from Dow's ethylene production facility in Freeport, TX, which is slated for start-up in 2017. Dow says the new facilities are in the Front End Engineering and Design (FEED) phase that will be completed in 2014.

Collectively, Dow expects its new plastics facilities will employ up to 3000 workers at construction peak. Over the next five to seven years, Dow estimates that these projects, together with all other planned projects previously announced as part of the company's U.S. Gulf Coast investment plan, will employ approximately 5000 workers during peak construction and support over 35,000 jobs in the broader U.S. economy.

"These new facilities will include a wide range of technologies that will produce differentiated, high performance materials for the fastest growing segments in Dow's existing markets, while providing access to new markets and applications," said Jim Fitterling, Dow executive VP, in a news release. "These investments are also aimed at businesses that have consistently delivered a higher return on capital, which is clearly aligned with our long-term strategy. This, coupled with an enhanced market and value chain focus in our high value performance plastics franchise, will deliver faster growth with lower earnings volatility."

Dow also announced today an initial agreement for a long-term ethylene off-take arrangement with a new joint venture to be formed between Idemitsu Kosan Co., Ltd., and Mitsui & Co., Ltd., of Tokyo, Japan. Idemitsu and Mitsui will form the joint venture to construct and operate a linear alpha olefins unit on the U.S. Gulf Coast. The JV will utilize an integrated supply of ethylene from Dow's U.S. Gulf Coast production grid to produce linear alpha olefins used as comonomers throughout Dow's plastics franchise.

This news comes after Dow announced it was looking to sell its polypropylene licensing and catalyst business and its plastics additives unit. The company is targeting an increased divestiture list of nearly $1.5 billion over the next 18 months.

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