Midland, Michigan – The Dow Chemical Company’s polyurethane business restructuring in 2013 is paying dividends in terms of performance, Mark Bassett, global vice president, Polyurethanes told UTECH-polyurethanes.com in an exclusive telephone interview.
Bassett, who will be giving the keynote speech at the upcoming UTECH North America exhibition and conference in Charlotte, North Carolina, said integrating the components and systems businesses and focusing on customer needs was working well.
[disclosure:UTECH-polyurethane.com is published by Crain Communications which produces the UTECH North America conference and exhibition]
Bassett is likely to expand on the broader opportunities for innovation that the polyurethane industry offers in his keynote address: A world of change, a world of opportunity.
Speaking of the changes in his own business, Bassett said that Dow Polyurethanes has streamlined its R&D focus and by working more closely with its customers, has improved product mix. This market focus is allowing the business to aim at higher-value segments such as industrial and energy efficiency. Additionally, it has enabled the business to “find a better balance between the components and systems businesses,” said Bassett.
Dow Polyurethanes sits in the company’s Performance Materials division, which, according to a presentation accompanying an investor relations conference call on 23 April, is tasked with increasing its profitability from 11% to 11.4% in the near term.
Dow Polyurethanes is working hard towards this goal, said Bassett. There have been six facility closures that were no longer in the correct locations, or which were uneconomic to run, including the Camicari, Brazil TDI plant, an MDI distillation facility in Korea and four system houses in Europe that “were redundant,” Bassett said.
This process has led to a 14% fall in costs in the six months which ended in the first quarter of 2014 compared to the same period in 2013 in the polyurethane segment, according to the investor presentation.
It has not all been about controlling cost though, Bassett explained. There have been investments in Terneuzen, the Netherlands, Freeport, Texas and in Thailand. There has also been the Sadara investment in Saudi Arabia where construction is “on track for a start up in the third quarter of 2015,” said Bassett.
This should help to accelerate growth in emerging markets and Dow expects that its share of demand for MDI will increase in Europe, Middle East, Asia and Asia Pacific regions from 10% in 2010 to 12% in 2018, three year’s after Sadara goes on stream, according to a Dow Sadara update on 20 March 2014.
“Today we have a better asset structure, it is a global asset structure that’s better suited to meet market needs,” said Bassett.
Chris Chrisafides, senior commercial director, North America explained how Dow Polyurethanes approaches the market. “Now we align ourselves by market segments,” he said. These are “energy efficiency, industrial - mostly coatings, adhesives, sealants and elastomers - and consumer comfort,” he explained
Dow also segments its customers on the level of technical support they require: “We are able to sell base materials such as isocyanates to some customers, semi-complete systems to others and finally systems to a third group of customers,” said Chrisafides.
“We’re connecting Dow science with customers who have their fingers on the pulse of the marketplace. UTECH provides the perfect stage to bring our industry together to combine expertise with opportunity,“ he said.
Chrisafides explained how Dow’s contribution to UTECH North America would outline the final plank of the business’s value proposition: innovation. This will start at 10:40 on Wednesday 4 June with a paper entitled enhancing the formulator’s tool box with a novel high performance polyether polyol. This will explain how Dow’s Voranol 223-060LM polyol helps CASE and TPU formulators to improve efficiency and retain processing and performance properties. Other papers will examine how polyisocyanate polyaddition copolymers allow foamers greater versatility in formulations, and how novel hydrophobic polyols give robust products with lasting versatility.
On Thursday 5 June Dow speakers plan to present papers on novel polyurethane systems for insulation of appliances and panels – outlining the benefits of its Pascal and Pascal Pro technology and finally a presentation on polyisocyanurates foam systems which offer fire rated solutions for metal panels, based on Dow’s Voratherm non halogenated foam systems.