Dow Chemical unveils broader US, EU investments

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Dow Chemical Co.'s investment plan includes s $100 million innovation center in Midland, Michigan

Dow Chemical Co. is increasing its already major investments in US plastics and petrochemicals, with plans to build a “world-scale” polyolefins facility in Europe with annual capacity of almost 1bn pounds.

Company officials revealed the new investments 11 May during Dow's annual shareholders' meeting at its headquarters in Midland, Mich. New projects include:

• Construction of a world-scale polyethylene unit with more than 1.3bn pounds of annual production capacity on the US Gulf Coast. The new PE unit will be based on Dow's proprietary Solution Process technology and will address demand in specialty packaging and industrial and consumer packaging applications.

This investment is in addition to four new PE lines already being installed at Dow's Gulf Coast locations that will add approximately 2bn pounds of annual production capacity.

• Expanding annual capacity of Dow's new ethylene cracker in Freeport, Texas, to more than 4bn pounds, making it the world's largest ethylene facility. The cracker will add two furnaces.

• An unspecified series of investments to strengthen Dow's polyurethanes franchise. These investments will be aimed at driving downstream specialty polyols and systems growth.

• Increasing PE capacity by almost 800m pounds — primarily in North America — through a series of incremental debottleneck projects.

• Construction of a world-scale polyolefins facility in Europe with annual capacity of almost 1bn pounds. This addition will maximise Dow's ethylene integration in the region and will serve growing demand for high-performance pressure pipes and fittings, as well as caps and closures.

• Enhancing its Pack Studios global network of packaging experts, equipment and testing capabilities that encourages collaboration to develop better packaging. Over the next two years, Dow will drive several advancements in the US and globally in PE and adhesive innovations and rapid prototyping.

• Investing an additional $400m (€368m) in Midland to integrate Dow and Dow Corning's manufacturing operations.

• A new, $100m (€92m) innovation centre in Midland. The centre will house scientists and engineers who will focus research and development activities for home and personal care products. They will work to broaden Dow's energy-saving building technologies; enhance materials for infrastructure; and drive closer partnerships with automakers as they accelerate efforts to light-weight automobiles.

"Today's announcement underscores Dow's commitment to driving the next phase of our growth through a comprehensive set of investments that will benefit our shareholders, customers, employees and the communities in which we operate," Dow Chairman and CEO Andrew Liveris said in a news release.

"Manufacturing plays a vital role in driving economic growth and prosperity across virtually all sectors of society," he added. "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 US."

The new projects will increase Dow's recent investment total to more than $12bn (€11bn) over a 10-year period. They're expected to employ approximately 5,500 workers at peak activity, as well as create 300 permanent jobs and almost 2,000 related jobs in the broader economy.

The investments announced 11 May are expected to come online "in a phased manner," beginning in 2020. They'll require estimated capital expenditures of approximately $4bn (€3.6bn), spread over the next five years.

Dow President and Chief Operating Officer Jim Fitterling added in the release that the investment plans "enhance our unparalleled, cost-advantage integration and bolster our industry-leading innovation to deliver long-term growth."

Officials said Dow has created more than 10,000 direct and indirect jobs in the United States in the last four years. Most of that job creation comes from the firm's spending more than $6bn (€5.5bn) in manufacturing investments on the Gulf Coast. Those projects employed 7,000 construction workers at the peak.

These existing investments will create 500 full-time Dow jobs and further support more than 3,000 jobs in the broader US economy, officials said. Dow also continues to accelerate its partnerships with leading colleges and technical and vocational institutions to train thousands of young and displaced workers to deliver what officials describe as "the workforce of tomorrow."

Dow's apprenticeship programme offers a pathway to a wide variety of manufacturing careers through both formal education and on-the-job training, they added. The program currently hosts more than 500 apprentices and to date has graduated nearly 3,000 apprentices, officials said.

Dow ranks as one of the world's largest plastics and chemicals producers. The firm posted sales of $48.2bn (€44.3bn) in 2016. Dow is in the process of merging with DuPont Co., another global plastics and chemicals giant. The combined firm then plans to split into three separate public companies, including one focused on materials.

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