Dow 'actively looking' for M&As, acquiring system houses

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Jon Penrice

Dow Polyurethanes is on the hunt for systems houses that fit with its strategy in higher added value markets segments, Jon Penrice, vice president Dow Polyurethanes, said at UTECH Europe 2018, Maastricht, Netherlands.

Penrice speaking on the fringes of the meeting said: ‘We have gone through a strategic review. We are actively looking for M&As.’

"We want to pick up the pace again. It’s a good strategy, we took a rain check on it," he explained. "We would like to grow our systems business at close to double digit; 8-10% is our projected rate."

"Acquisitions give us channels to market as well as speed," he said.

"We are interested in acquiring technology positions in the CASE area and composites and in rigids."

"Technical insulation for pipes… consumer areas too in the comfort sector. Within CASE, protective coatings for truck floors, adhesives, are all targets."

Dow sees systems as a way of moving up closer to adhesives customer in the supply chain.

Penrice explains: "Dow is a large company in the adhesives sector, but as a raw material supplier. Dow is interested in industrial and construction adhesives. Elastomers, small customers high technology and higher than usual P/E margins."

Footwear, ‘could be interesting as it moves back out of Asia to Turkey, North Africa and its going a bit further up market.’

Composites is the final area of interest ‘it’s fairly small, compared to unsaturated polyester resins, but processability and performance are there. Polyurethanes sit in the gap where it is more processable than epoxy and higher performance than polyester. We’re seeing much higher growth rates in composites in automotive and industrial applications.’

Penrice added: "There are small companies that lack scale but have global ambition, we can give them global growth and expansion."

"We are also very flexible on the type of M&A, they could turn into joint ventures, marketing alliances. We are not dogmatic. We want the entrepreneur to have skin in the game and to want to continue, but we can help scale, and they can grow much faster with us, or they can cash out."


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