By Liz White, UT staffMidland, Michigan-Dow Chemical Co.'s Polyurethane Components (polyols and isocyanates) business had a good fourth quarter 2005, although volume was down, according to Kathleen Fothergill, corporate director, for investor relations. And Dow has spurned business in polyurethanes, to maintain margins, she said, in a conference call following Dow's fourth quarter and 2005 results meeting. The lower volume in polyurethanes was "in part because of some operational issues, but also because more volume was moved downstream into higher value Systems House applications and into Dow Automotive," said Fothergill. And "In some instances, the business also walked away from potential sales in order to manage margin," she commented. In its Performance Plastics business, which includes the PU raw materials, sales for the fourth quarter were $2900 million, an increase of 12 percent compared with Q4 2004. Prices were up 10 percent while volume climbed 2 percent, bolstered in part by the successful integration of the elastomers gained in the dissolution of the DuPont Dow Elastomers joint venture, said Dow. As a whole, Dow Chemical's Q4 2005 sales set a new company record, rising 9 percent from the same period last year to $11 900 million. Net income was $1026 million, a 6.4 percent drop over Q4 2005. For the whole year, Dow's sales climbed 15 percent compared with 2004, "setting a new record" at $46 300 million, Despite feedstock and energy cost increases of $4000 million in 2005 compared with 2004, Dow managed net income of $2797 million, compared with $4515 million in 2004."This was a tremendous quarter at the end of an outstanding year for Dow," said Andrew Liveris, Dow's president, chief executive officer and chairman-elect, in the conference call. In 2005, Dow had record sales and record earnings: "we reduced net debt by more than $2500 million; and for the third year in a row … we recovered lost margin. The fact that we did so in the face of high and volatile feedstock and energy costs bears testimony to the quality of our people and the strength and consistency of our strategy," Liveris said. "2005 was a year with many challenges for our company … including relentlessly escalating feedstock and energy costs and two major hurricanes that caused significant disruption to Dow's operations on the US Gulf Coast and to our logistics across the region," Liveris commented. Having split its businesses into '`Basic' and 'Performance' categories during the latter half of 2005, Dow's overall strategy is now to "preferentially invest in Performance businesses, with the goal of improving both the growth of our earnings and the consistency of our earnings from year to year," said Liveris, "You can expect to see our Performance businesses grow organically and through bolt-on acquisitions … and through the creation of more market-facing businesses that bring the full power of Dow's products to industries like Automotive, Building and Construction and Personal Care, Liveris said. "
