Dow to Spend $4 Billion to Hike Output

16.05.2017 -

Even though it is in the throes of finalizing a merger with DuPont, Dow Chemical has announced investments totalling $4 billion over the next five years. Plans include an expansion of its Texas cracker and additional polyolefin capacities in the US and Europe.

CEO Andrew Liveris said the bulk of the investments will capitalize on the competitive advantage offered by the proliferation of cheap US feedstocks. The new plants will go on stream in phases starting in 2020.

The spending program will see Dow increase output at its new TX-9 ethylene cracker in Freeport, Texas, to 2 million t/y, making it the largest in the world. Construction of the cracker was completed in March with a nameplate capacity of 1.5 million t/y.

A 600,000 t/y PE unit based on Dow’s proprietary Solution Process technology will be built on the US Gulf Coast, designed to meet demand in specialty packaging, health and hygiene, and industrial and consumer packaging applications.

Dow will also undertake a series of incremental debottlenecking projects to widen polyolefins capacity by 350,000 t/y, mostly in North America. In Europe, a new 450,000 t/y polyolefins plant will be installed, which the group said will maximize its ethylene integration in the region and serve rising demand for high-performance pressure pipes and fittings, as well as caps and closures applications.

Investments also will be made to strengthen Dow’s polyurethanes chain, to drive growth downstream in specialty polyols and systems. Additionally, it will license technology from its Univation subsidiary to develop a new catalyst unit.

Group headquarters at Midland, Michigan, will benefit from an additional $500 million to allow greater synergies from integrating Dow Corning's manufacturing operations as well as the development of a new innovation center. Altogether, the projects extend Dow’s US investments to more than $12 billion over a ten-year period and are expected to create 300 permanent jobs.

Dow and DuPont expect their merger to complete between Aug. 1 and Sep 1, 2017, with the intended spin-offs required to meet antitrust approvals planned to take place within 18 months of closing.