Dow Chemical Presses on with Sadara Start-Up, Sees Progress on Texas Ethylene Unit

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Researched by Industrial Info Resources (Sugar Land, Texas)--Dow Chemical Corporation (NYSE:DOW) (Midland, Michigan) is certainly no static target. Fresh from achieving full ownership of Dow Corning's silicones business, the global chemicals producer is pressing on with its planned merger with E. I. du Pont de Nemours and Company (DuPont) (NYSE:DD) (Wilmington, Delaware) by the end of the year. On top of that, Dow is starting up components of the huge Sadara joint-venture complex in Saudi Arabia and plans to have its 2.6 billion-pound-per-year unit in Corpus Christi, Texas, online in mid-2017.

Industrial Info is tracking $7.11 billion in active Dow projects, plus billions of dollars more in the Sadara joint venture.

Chief Executive Officer Andrew Liveris recently discussed the completion of the ownership change for Dow Corning's silicon business in June. Dow Corning was previously a 50:50 joint venture between Dow and Corning Incorporated (NYSE:GLW) (Corning, New York). Dow said it expects to achieve $500 million in synergies with its fully owned silicones business--a $100 million increase from the initial target. The transaction is expected to add more than than $1 billion of earnings before interest, taxes, depreciation and amortization (EBIDTA). Synergies and restructuring will eliminate 2,500 jobs.

In July, stockholders with Dow and DuPont approved the merger of the two companies. Industrial Info is tracking active DuPont projects worth $651.7 million, including a $275 million commercial-scale cellulosic fuel ethanol plant in Nevada, Iowa. Completion of the facility is presently set for fourth-quarter 2016.

With the completion of the Dow-DuPont merger later this year, the company plans to split into three publicly traded businesses--material sciences, agriculture and specialty products. For related information, see December 14, 2015, article - Dow-DuPont Mega-Merger to Have Widespread Impact

Dow executives noted during the company's recent second-quarter earnings conference call that start-up activities continue at the massive Sadara Al Jubail complex, a joint venture with Saudi Arabian Oil Company (Saudi Aramco) (Dhahran, Saudi Arabia). Industrial Info is tracking Sahara projects worth $6.56 billion that are connected to the complex. Chief Operating Officer James Fitterling said the complex's multi-feed cracker was in the early phases of start-up and is expected to achieve commercial operation in the third quarter this year. The ethylene unit project had an investment value of $1.7 billion. All construction at the Sadara site should be complete by year's end, with commissioning thereafter, he added. The complex will have 26 production units.

On the U.S. Gulf Coast, Dow's ethane cracker project at Freeport, Texas, is on schedule for mechanical completion in second-quarter 2017, with commissioning and start-up to follow, Fitterling said. The 2.6 billion-pound-per-year ethylene unit has an investment value of $1.7 billion.

"And the polyethylene plants are coming along very nicely," Fitterling added. For related information, see May 12, 2016, article - Dow Chemical U.S. PE Projects Expected to See Completion by Year's End.

Dow reported $3.12 billion in net earnings for the just-ended second quarter, up from $1.14 billion in the same period of 2015, largely a result of its new full ownership of Dow Corning's silicon business. Sales were $12 billion, down 7% from second-quarter 2015 as a result of lower hydrocarbons and raw material prices and the impact from the divestiture of its chlorine products segment.

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