By Frank Esposito, Plastics News staff
Midland, Michigan -- Dow Chemical Co. has made it through a challenging 2009 and is looking forward to better days in 2010.
Combined sales at Dow's two plastics-related business units -- Basic Plastics and Performance Products -- were down 30 percent in 2009 to about $19 000 million. But the units' combined operating profit roughly was flat at around $2800 million.
Overall sales at Midland, Michigan-based Dow -- which ranks as one of the world's largest plastics and chemicals firms -- were down 22 percent to $44 900 million, although the firm's full-year profit grew 3 percent to $676 million.
Plastics-related businesses accounted for about 40 percent of Dow's segment sales in 2009, with Basic Plastics -- polyethylene, polypropylene, styrenics and polycarbonate -- and Performance Products -- polyurethane, epoxy and other speciality materials -- each chipping in about 20 percent. Based on sales in dollar amounts, those units were the two largest among Dow's eight operating segments in 2009.
In a 2 Feb conference call, Dow ceo Andrew Liveris was effusive in praise of his firm's performance and of its future prospects.
"We have the right portfolio, the right geographic position and the right pipeline," he said. "The Dow of tomorrow is here today."
In 2010, Liveris said Dow will continue to look for partners for its commodity plastics units and for a buyer for its Styron styrenics business, including polystyrene.
Regarding commodity plastics (PE, PP and PC), Liveris said that Dow "is talking to three strategic partners in a JV construct," but he added that Dow "is not in a hurry."
Liveris also credited the firm for recovering from the collapse of a planned plastics joint venture with a Kuwaiti firm in late 2008 and from the tumultuous acquisition of specialty chemicals form Rohm and Haas in the first half of 2010.
"We acted quickly to position ourselves with the new realities," he said, while listing the following 2009 Dow accomplishments:
* Reducing overall debt by $2500 million since April 1.
* Selling off $3000 million of non-core assets, including the Morton Salt unit of Rohm and Haas.
* Meeting 70 percent of its two-year target of $2500 million in Rohm and Haas-related savings.
* Paying off an acquisition-related bridge loan ahead of time.
* Establishing a Dow-record $1600 million research and development budget for 2010.
Dow's global Basic Plastics sales were up 17 percent in the fourth quarter, when compared to the year-ago period, while Performance Products' sales were up about one percent in the same comparison. Performance Products benefited from higher polyurethane volume because of successful penetration of appliance end markets, while Basic Plastics grew as a result of rising global demand and strong exports from North America to Asia, officials said.
See a longer version of this story at www.plasticsnews.com