Dow Investing In Thailand

Dow Chemical says it is moving forward with plans to build a $1.1 billion liquid-feedstock-based ethylene cracker in Rayong, Thailand, with the country's Siam Cement Co.

The plant, which is expected to come onstream in 2010, will be located near Dow's existing joint ventures with SCC in Map Ta Phut, Thailand. Dow is considering a propylene oxide plant, based on the hydrogen peroxide-based process it developed with BASF, downstream from the unit. Dow says the new cracker will also enable an expansion of its polyethylene joint venture with SCC.

The company signed a letter of intent to build the cracker last November. At the time, SCC said it would have a 67% stake in the project, which would have annual capacity for about 900,000 metric tons of ethylene, 800,000 metric tons of propylene, and 700,000 metric tons of other coproducts. SCC intends to separately invest about $400 million on new polyethylene and polypropylene plants.

In addition to their polyethylene joint venture, Dow and SCC have ventures to manufacture styrene, polystyrene, polyols, and synthetic latex.

Andrew N. Liveris, Dow's chief executive officer, says the new venture "is another example of our asset light investment approach, through which we will grow the [basic chemicals] businesses in joint ventures with strategic partners like SCC."

In July, Dow announced that it was in exclusive negotiations with Saudi Arabian Oil (Saudi Aramco) for a chemicals and plastics joint venture at Saudi Aramco's Ras Tanura, Saudi Arabia, refinery. Dow is planning an ethylene/polyethylene joint venture with Oman Oil in Oman. The company is also expanding its partnership with Petrochemical Industries of Kuwait with another ethylene cracker and derivatives complex, currently under construction in Kuwait.