From Plastics News
Midland, Michigan - Dow Chemical Co. has unveiled a new operating segment line-up, the company said recently during its 2009 second quarter (Q2) results conference call.
In the new line-up, Basic Plastics -- including PE and polypropylene -- is in the Basics segment, along with Basic Chemicals and Hydrocarbons & Energy. Most of Dow's speciality plastics are in the Performance Products and Systems segment, including its polyurethane activities. Combined, Basic Plastics and Performance Products account for about $27300 million in annual sales -- more than 40 percent of Dow's annual sales total.
Dow, one of the world's largest plastics and chemicals firms, is in the process of re-inventing itself under an "asset-light" strategy, with a target of generating two-thirds of its sales from speciality businesses.
The strategy already has resulted in the elimination of almost 5000 jobs, with another 3000 yet to be announced. Dow has closed several plants since late 2008, including PE plants in Texas and Louisiana, and plans to close three additional plastic feedstock plants in Louisiana as well.
In the midst of this strategy, Dow completed a tumultuous $15300 million acquisition of speciality chemicals firm Rohm and Haas Co. of Philadelphia. Since closing that deal on 1 April, Dow already has sold Rohm's Morton Salt unit for $1700 million.
Dow also announced its second-quarter results 30 July, showing a loss of $332 million as sales fell 31 percent to $11 300 million compared with the year-ago period. Sales in Basic Plastics fell 42 percent in the same comparison. For the first half of 2009, Dow's overall sales fell 39 percent to $22 100 million as the firm lost $297 million.
"The economic outlook for the rest of 2009 appears to be stabilising, with strong growth in Asia Pacific, especially China, where domestic stimulus programmes have created demand," Dow ceo, Andrew Liveris said in a 30 July news release. "In our view, the United States economy has found bottom, but will be slow in recovering as unemployment continues to be a drag on consumer spending," he added.
The company also revealed it plans to sell off a newly formed unit that includes its styrenics and polycarbonate holdings. Officials at Midland, Michigan-based Dow hope to sell the unit for between $1000 million and $2000 million.
This story is taken from a longer one in Plastics News, a sister publication to Urethanes Technology International and part of Crain Communications. (RD)