Dow to exit petrochem business in India to focus on speciality chemicals

24-Dec-08

Dow Chemical International Pvt. Ltd., Dow's Indian arm plans to exit the petrochemical business to focus on speciality chemicals. As of now, the Indian arm buys petrochemical products from its parent company for trading in India, leading to poor margins. Approximately 30% of Dow Chemical India's projected sales of about Rs 2,500 crore for the financial year, will be contributed by the petrochemical business. Unlike its global parent, the company is not planning layoffs in India. Dow Chemical Co. is currently going through a restructuring, closing 20 plants, suspending work at another 180 factories and laying off 5,000 of its 46,500 employees across 175 countries. The Indian arm in fact, wants to more than double the headcount to about 2,000 next year from 960 now, to focus on innovation, and design and develop technology for the speciality chemical business in India at its three centres. In India, growth in the commodity business is very difficult because of competition. It is also not very profitable because of lower margins for commodity products. The segment which is profitable is one that is able to respect technology. Dow is currently in the process of moving technologies and centres of excellence to India because of low costs and high quality of talent.