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| Dow to shut chlorine, caustic production in Texas; divest up to $5 bil in assets |
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| News Source：http://www.jinchemical.com/
; SendDate：2013-12-3 13:48:41 |
Dow Chemical will shut the equivalent of about 800,000 mt/year of chlorine and caustic soda capacity in Texas and divest chlorine derivatives assets with a value of up to $5 billion, it said Monday.
The divestment includes about 40 manufacturing facilities at 11 sites, including the chlorine and caustic soda capacity in Freeport, Texas, and nearly 2,000 employees, Dow said.
"Today's announcement represents a continuation of the shift of our company toward downstream high-margin products and technologies that customers value, and generate consistently higher returns than cyclical commodity products," Dow Chemical CEO Andrew Liveris said. "We are committed to prioritize our resources such that we maximize total shareholder return."
The assets included in what the company described as a "carve-out" are Dow's chlor-alkali and chlor-vinyl facilities in Plaquemine, Louisiana, and Freeport, including Dow's interest in the Dow Mitsui Chlor-Alkali joint venture in Freeport.
Also on the block are its global chlorinated organics production facilities in Freeport, Plaquemine, and Stade, Germany as well as its global epoxy business, including assets in Freeport, Roberta, Georgia; Rheinmuenster, Germany; Pisticci, Italy; Stade and Baltringen, Germany; Gumi, South Korea; Zhangjiagang, China; and Guaruja, Brazil.
The company's brine and select assets supporting operations in Freeport and Plaquemine, and energy operations in Plaquemine will also be divested.
Dow's caustic soda production in the Gulf Coast is estimated at 3.9 million mt/year, according to Platts data. Confirmation of that total from the company was not immediately available.
The chlorine and caustic soda equivalent capacity being shut in Freeport will be replaced with supply from new facilities that will come online with the startup of the Dow Mitsui joint venture in early 2014, the company said.
The shuttering of capacity will help maintain Dow's balance and will be coordinated with the startup of the joint venture, the company said.
"These businesses have served us well over decades, but are serving markets that Dow has exited over time, and we are therefore right-sizing our upstream integration to match the downstream focus that we started a decade ago," Liveris said.
"Separating these business units will allow us to further optimize the way they can be operated; and we believe different owners will be able to extract maximum value from these highly competitive assets and their related markets," he added.
Dow Chemical said it has retained financial advisers to explore alternatives for these businesses, including potential ownership structures and partnerships such as joint ventures, spin-offs and divestitures, and expects to execute transaction activities related to these businesses within the next 12-24 months.
Over the past 12 months, Dow Chemical has completed or announced similar transactions totaling $700 million, including the definitive agreement to sell its global polypropylene licensing and catalysts business to W.R. Grace & Co..
In anticipation of this separation, the company announced in October the expansion of its divestiture target to $3 billion-$4 billion in proceeds over the coming 18-24 months. |
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