Emerging Economies Provide Dow Chemical Strong Fourth-Quarter Sales

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Researched by Industrial Info Resources (Sugar Land, Texas)--Dow Chemical Corporation (NYSE:DOW) (Midland, Michigan) recently reported earnings for the fourth quarter of the company's 2009 fiscal year. Dow's quarterly net sales of $12.47 billion were 10% higher than 4Q08 and 3% higher than the previous quarter. While sales volumes in North America declined, emerging economies presented strong sales growth, resulting in higher overall sales for the quarter.

"The power of our strong geographic footprint manifested itself once again, specifically in the emerging geographies of Asia Pacific, Latin America, Eastern Europe, India and the Middle East, which all had double-digit volume growth over the fourth quarter of last year. Overall, emerging geographies posted volume growth of 33%," said Dow Chairman and CEO Andrew N. Liveris in a conference call regarding the earnings. Sales volumes in India, the Middle East and Africa increased 41% year over year, while sales volumes in the Asia Pacific and Latin America regions grew 34% and 21%, respectively.

"EBITDA increased by $809 million, and in all operating segments except Health & Agricultural Sciences, which declined primarily due to increased investment in R&D as we continue to fund growth in this exciting segment of our company," said Liveris. "EBITDA in the combined performance segment was up 88% versus the fourth quarter of last year."

While earnings for the company's Health & Agricultural Sciences segment were down, the segment actually demonstrated some of the strongest sales growth of all of Dow's business segments. Sales were $1.1 billion, up 17% from the previous year. The Latin American region had particularly strong sales of herbicides and insecticides during the quarter.

Dow's Basic Plastics segment also had strong performance. Sales of $2.9 billion were up 17% year over year. "Continuing demand for polyethylene drove double-digit volume growth versus the fourth quarter of 2008," said Bill Weideman, vice president and interim chief financial officer. "This is the fourth consecutive quarter of polyethylene volume growth, due in part to an open export window from North America due to relatively low gas prices and the weak U.S. dollar. I would also like to point out that the Basic Plastics segment, which is comprised primarily of polyethylene, generated $1.7 billion of EBITDA in 2009. In one of the worst economic climates in decades, this is truly an impressive performance." Primary export outlets for polyethylene included Latin American and the Asia Pacific region.

Industrial Info is tracking slightly more than $1.5 billion of Dow's projects throughout the world. In the second quarter of this year, the company plans to perform a $25 million maintenance turnaround on the Light Hydrocarbons Unit 2 at the company's facility in Plaquemine, Louisiana. The 40-day turnaround is tentatively scheduled to kick off in April. Information on these and other projects in the Chemical Processing Industry can be found in Industrial Info's North American Industrial Database.

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