US chemical major, Dow Chemical faced a severe blow as Kuwait withdrew from the deal to form US$17.4 bln petrochemical joint venture with state-owned Petrochemical Industries Co (PIC). Kuwait's Supreme Petroleum Council (SPC), at a meeting headed by Prime Minister Sheikh Nasser al-Mohammad al-Sabah, reached an agreement to scrap the deal which faced severe opposition from the members of the parliaments. The reasons cited for the abandonment of deal was the global financial gloom and the protection of Kuwait's 'rights and interests.'
State-owned PIC was to pay US$7.5 bln to Dow in order to form K-Dow Petrochemicals and was proposed to market petrochemicals and plastics such as PE, PP and PC used in variety of applications. Kuwaiti law makers held that the venture was not economically feasible in the backdrop of the global financial whirlwind and decline in petrochem sales and the government was accused of misusing public funds. Recently, Dow shut 20 facilities, sold several businesses and trim 11% of its workforce while plans to temporarily idle 180 lines are under consideration. Also, Dow has announced to broaden its specialty chemical portfolio by acquiring Rohm & Haas for US$15.3 bln. However, Dow said in a statement that the company 'remains committed to its Middle East Strategy.'