Dow Commits to $1 Billion Cracker Project in Thailand

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Researched by Industrial Info Resources (Sugar Land, Texas). Dow Chemical (NYSE:DOW) (Midland, Michigan) is going ahead with plans to build a 900,000 tons per annum (tpa) ethylene cracker with Siam Cement Company (OTC:SCVQF) (SCC) (Bangkok, Thailand) in Thailand. The plant will be located near the existing Dow-SCC 800,000 tpa cracker that is operated by SCC at Map Ta Phut in Rayong Province.

The new joint venture with the Thai company forms part of Dow’s growth strategy planned for the Asia Pacific region. The cracker is scheduled to start commercial operation in 2010 and will have a propylene production capacity of 800,000 tpa. The joint venture holdings will be split 67% SCC and 33% Dow.

Dow Chemical chairman Andrew Liveris said that the project would strengthen the company’s presence in the region and provide a competitive platform on which to develop a range of higher margin business opportunities.

The ethylene and propylene output, as well as other feedstock materials from the plant, will feed a number of downstream projects operated by the joint venture. These will include a hydrogen peroxide to propylene oxide (HPPO) plant, a propylene glycol unit, a polyurethanes unit, and a glycol ethers unit.

The expansion of current alpha higher olefins polyethylene production at the plant will be facilitated by the capacity expansion. Specialty polyolefin products using Dow’s state-of-the-art process and catalyst technology will also be produced. The siting of the new plant adjacent to the existing complex at Map Ta Phut will enable existing assets, capabilities and infrastructure to be leveraged. This will provide an advantage for the production of raw materials for downstream derivatives business.

The value of the total project investment has not been finalized, but SCC stated in its annual report that the value would be $1.18 billion and that the downstream projects would cost an additional $430 million.

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