In the wake of its failed deal with Kuwait’s Petrochemical Industries Co. (PIC) and with some speculation that its planned acquisition of Rohm and Haas (Philadelphia) might falter as a result, Dow Chemical Co. (Midland, MI) has announced a separate agreement with Lubrizol Corp. (Cleveland, OH) to sell that company its thermoplastic polyurethane (TPU) business. The deal closed on Dec. 31, and includes Dow’s TPU plant in La Porte, TX, which manufactures the Pellethane and Isoplast brands of TPU, with the former used in applications like footwear, medical tubing, automotive, film, and industrial/engineering applications, and the latter applied in higher-end niche products that the company says require clarity, impact strength, and chemical resistance. The Dow trade names will be retained on the products, which generated $85 million in revenues in 2007. Financial terms for the deal, which includes all commercial, production, and R&D assets, as well as approximately 40 full-time employees, were not disclosed.
Lubrizol is established in thermoplastic elastomers, including TPUs, with its Estane TPU that sees use in film extrusion, injection molding, and calendaring for applications like tubing, cable jacketing, and more. For its part, Lubrizol stated in a release that Dow’s TPU products give it access to specialized applications in areas like niche medical, while it can market the Dow products into international markets beyond North America.
Lubrizol has been building its TPU business in recent years, purchasing Noveon (Cleveland, OH) on June 3, 2004, with that company bringing on TPU production in China in 2005, adding to existing facilities in South Korea and Malaysia. One year ago on Jan. 4, Lubrizol completed the addition of a new TPU production line at its Avon Lake, OH, manufacturing facility. The addition increased Estane capacity by 30%, and joins global TPU manufacturing in Oevel, Belgium and Songjiang, China near Shanghai.
On the same day Dow announced the Lubrizol deal, it said in a separate release that it will pursue legal and “other” options with regards to the failed Kuwaiti joint venture, as well as “accelerate discussions around new partnerships.” Dow will now look to “enforce its rights” under the joint-venture agreement it had finalized with Kuwait’s PIC. Dow Chairman and CEO Andrew Liveris said his company was “shocked” by the news that PIC would back out from the K-Dow venture, adding the decision was “completely unexpected given the approvals already received and the behavior, actions, and words from our partners.” Liveris added that the decision to pursue litigation against PIC was not an easy one, but that Dow considers the Kuwaitis to be in breach of contract.
Regardless of that legal battle, Liveris said Dow is committed to a restructuring of its business that would place its “commodity” resin assets, chiefly polyethylene and polypropylene, in a joint venture. Liveris added that Dow has already been approached by other parties interested in venturing with it for those basic plastics businesses, although it declined to name who has shown interest.—[email protected]