Midland, Michigan - Dow Chemical reporter third quarter sales of $13.7 billion, up 1% on the same period in 2012, and earnings before interest, tax, depreciation and amortization of $1.8 billion in the third quarter of 2013
Chief financial officer, William Weideman said that Dow "achieved price gains in most business units, however this was more than offset by higher raw material costs.
In turn, he said this lead to "margin contraction in portion of a chlorine value chain, particularly epoxy or chlorinated organics and polyurethanes.
Andrew Liveris president, chairman and chief executive officer said that in the polyurethanes market: "We remain convinced that through our chemistry and material science capabilities we can win in select end markets that offer attractive growth."
His firm will continue to select attractive markets, reduce cost, optimize its portfolio of products and improve integration back up the raw material chain. It will invest in the propylene dehydrogenation plant in the US Gulf and Sadra joint venture with Saudi Aramco as a way of securing attractively priced feedstock, Liveris added
"Bottom line, we are confident that the fixed actions we are taking now would deliver meaningful improvement for polyurethanes and the longer term fundamentals of our portfolio remain attractive for earnings growth," Liveris said.
Liveris said: in polyurethanes, we have teams that focus in the four key sectors. These are: automotive, which Dow expects to grow by around 6%/year compound (CAGR) from 2012 to 2017; Industrial 5% CAGR in the same period; energy efficiency and consumer comfort, both likely to grow at 4% CAGR, Dow expects.
Liveris added that, his firm is "optimizing every step of the value chain. We are focusing on operational excellence in our components businesses and rightsizing our systems business for new market realities, particularly in Western Europe. We have shut six assets over the last 12 months and reduced structural costs through streamlining the organization."
"Going forward, we expect our cost reduction actions in Polyurethanes to provide an additional $100 million of benefit to the bottom line," he said.