Dow Chemical Reinforces Strategy and Already Sees Success in New K-Dow Joint Venture

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Dow Chemical Company (NYSE:DOW) (Midland, Michigan) is sticking to its old strategy, Geoffery Merszei, Executive Vice President and Chief Financial Officer, said at the recent 17th Annual Chemical and Ag Science Conference. But the difference this time is that the company is actually going to execute it, he said. Some of the company's key focuses include:

• Actions to lighten basic footprint while positioning businesses for growth
• Investing in the performance of specialty business, which have higher margins and more stable earnings
• Ensure that the company is deploying chemistry to work in the highest growth opportunities available
• Four mega-trends

Merszei said he believes that the four trends -- health, energy, infrastructure and transportation, and consumerism -- will drive growth in the future. Dow has built a robust research and development pipeline aligned to these trends, he said. "Mega-trends are about growth and getting the right level of focus on the right opportunities at the right time," Merszei said. "This, coupled with our strategy, serves as a road map to driving our earnings growth higher with less volatility."

One of Dow's major plans in action is the formation of K-Dow Petrochemicals, a joint venture with the Petrochemical Industries Company, a subsidiary of Kuwait Petroleum Corporation. "Through the formation of K-Dow Petrochemicals, we have created a world-class petrochemical player by contributing several of Dow's leading basic businesses," Merszei said. At the time of the joint-venture announcement, Dow said that it expects K-Dow Petrochemicals to have annualized revenue of $13 billion and $19.5 billion in pre-tax cash proceeds. "K-Dow will have unparalleled technology, R&D and industry-leading brands," he said. The new company will be headquartered in southeastern Michigan and is expected to be operational before the end of the year, Merszei said.

In July, Dow announced the acquisition of Rohm and Haas (NYSE:ROH) (Philadelphia, Pennsylvania). For details, view July 15, 2008, news article - Dow Chemical Reinforces its Future with Planned Acquisition of Rohm and Haas. "Rohm and Haas is a first class company with a strong portfolio, proven research and development capabilities and a highly talented workforce," Dow Chairman and CEO Andrew Liveris stated in a news release.

Industrial Info is tracking 95 active projects in which Dow or one of its business units is involved in across the world. The projects, totaling $18.84 billion, range from $1 million demolitions to grassroot facilities worth up to $3.6 billion.

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