Dow Chemical Inc. is planning to sell or spin off much of its chlorine business to refocus the company on fewer products in a move that will affect 40 plants and 2,000 employees around the world.
Dow chief executive officer Andrew Liveris said the shift will let the chemical company focus on such higher-value businesses as packaging, electronics and agricultural chemicals. He said the plan to focus on fewer markets and exit the so-called cyclical chemicals businesses was more than a year in the making and is intended to boost shareholder returns.
Mr. Liveris described the strategy announced Monday morning as a "landmark moment" for the company based in Midland, Mich.
"We are keen to move on this. We have a lot of growth in front of us," he said in a conference call with analysts.
Dow spokeswoman Rebecca Bentley said no Canadian plants are affected.
Dow makes ethylene glycol and polyethylene at Fort Saskatchewan and Prentiss in Alberta, styrofoam insulation in Vareness, Que., and paint additives near Toronto.
Dow expects it will take about two years to find buyers for all the businesses. Prices for cyclical chemicals can swing wildly, and have lower margins (10 – 15 per cent) than the higher-value products Dow wants to focus on.
The businesses on the block have total yearly revenues of about $5-billion (U.S.), but many are old and have low book values, Dow said. They include:
- Dow’s U.S. Gulf Coast chlor-alkali and chlor-vinyl facilities in Plaquemine, La., and Freeport, Texas, including Dow’s interest in the Dow Mitsui chlor-alkali joint venture in Freeport;
- Dow’s global chlorinated organics production facilities in Freeport; Plaquemine, and Stade, Germany;
- Dow’s global epoxy business, including assets in Freeport; Roberta, Ga.; Rheinmuenster, Germany; Pisticci, Italy; Baltringen, Germany; Stade; Gumi, South Korea; Zhangjiagang, China and Guaruja, Brazil; and
- Dow’s brine and select assets supporting operations in Freeport and Plaquemine; and energy operations in Plaquemine.