Dow outlines new US$4bn investment plan

DOW CHEMICAL has announced plans for US$4bn of investment in new plant and debottlenecking efforts in the US Gulf Coast and in Europe.

The five-year investment includes expanding the capacity of Dow’s TX-9 ethylene cracker in Freeport, Texas, which was completed earlier this year. The addition of two new furnaces will lift output by 500,000 t/y to 2m t/y, making it the largest ethylene facility in the world, the company said.

It will also add a new 600,000 t/y polyethylene unit on the US Gulf Coast, to meet demand for packaging across the consumer, health and industrial sectors. There are also plans to carry out a series of incremental debottlenecking projects across its global network of plants that are estimated to free up 350,000 t/y of additional polyethylene output.

Furthermore, it will build a 450,000 t/y polyolefins facility in Europe to meet demand for pressure pipes and fitting; it will construct a new catalyst production unit for catalysts licensed by Univation, though it has not indicated where; and will spend US$100m on a new innovation centre at its headquarters in Midland, Michigan for its scientists and engineers to develop new products.

The projects extend Dow’s investment to more than US$12bn over a ten-year period and are expected to create 5,500 jobs during development and 300 permanent roles once the work is complete.

An abundance of cheap shale gas produced in the US is fuelling a petrochemicals renaissance in the country, providing producers with both competitive fuel and feedstock.

Dow CEO Andrew Liveris said: “Today’s announcement underscores Dow’s commitment to driving the next phase of our growth…Manufacturing plays a vital role in driving economic growth and prosperity across virtually all sectors of society. 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 USA.”

The announcement comes as Dow seeks to finalise its mega-merger with DuPont. Plans are to divide the merged firm into three separate companies focussed on agriculture, materials science, and specialty products. However, these plans are now being reassessed following reported investor pressure. The companies announced last week that two independent directors have been appointed to lead a review into the spin-offs. Whether this will lead to a further delay in the tie-up or the resulting division, which had been scheduled to take place 18 months after the merger, remains to be seen.

A DuPont spokesperson told The Chemical Engineer: “Both boards have agreed to conduct a comprehensive review of the business composition of each division to ensure maximum shareholder value. The review will also evaluate total synergies and the time to spin each of the divisions.”