Future of Dow PP and PP catalyst business

07-Jun-11
Dow Chemical Co.’s polypropylene and PP licensing and catalyst businesses is up for sale. As per PlasticsNews, Dow is exploring strategic options for those businesses, which include two PP production sites in Texas and two more in Germany. This is in line with Dow’s philosophy of streamlining to move away from commodity plastics and moving faster into high-margin specialty plastics. The company has identified “technology-differentiated plastics” such as solution polyethylene and elastomers and market-focused units such as wire and cable and Dow Packaging and Converting as “the key growth businesses” in the firm’s newly formed Performance Plastics division. As per Dow chairman and CEO Andrew Liveris, “commodity plastics that have anything to do with propylene or ethylene, in the long-term, will not be part of Dow's future." Those comments seem to indicate that Dow’s massive PE business also would be on the selling block. Finding buyers for the PP units in the current market might prove challenging, especially with North American PP prices going through the roof as increased use of natural gas feedstock has tightened propylene supplies. High PP prices are leading processors to consider switching PP work in to high density PE, PS or even into non-plastic materials. Braskem SA and India’s Reliance Industries Ltd. seem to be potential buyers of the Dow PP assets.
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