Dow unveils $4 billion in new projects

At its annual shareholders meeting this morning, Dow Chemical announced a five-year, $4 billion round of investments on the U.S. Gulf Coast and beyond.

The company will add two furnaces at an ethylene cracker set to open later this year in Freeport, Texas. The additional equipment will expand the cracker’s capacity by one-third to 2 million metric tons per year, making it the largest ethylene plant in the world, Dow says.

The company will also build a 600,000-metric-ton polyethylene plant on the Gulf Coast. Improvement projects at existing plants, mostly in North America, will yield another 350,000 metric tons of polyethylene capacity.

Dow is also building a 450,000-metric-ton polyolefins plant in Europe to serve the high-pressure pipe market. It will be the first new polyolefins plant Western Europe has seen since the late 2000s. In recent years, capital spending in petrochemicals has favored lower-cost regions such as North America—with feedstock derived from shale gas—and the Middle East.

Dow intends to build a catalyst plant to support its Univation polyethylene licensing business. It also plans to strengthen its polyurethanes business with investments in specialty polyols and polyurethane systems.

Some $400 million will be directed to Dow’s Midland, Mich., manufacturing operations to enhance integration with the Dow Corning silicones business, which Dow took over last year.

Dow says the new projects will be completed starting in 2020. They will bring the firm’s total U.S. capital spending to $12 billion over 10 years.

“The positive investment environment in the U.S. chemical and materials sector, driven by competitive feedstocks and a skilled workforce, is a driver for Dow to further invest in the U.S.A.,” CEO Andrew N. Liveris says.

Dow has a lot on its plate. It expects its merger with DuPont to close in August, to be followed within 18 months by a breakup into three separate firms. One of the firms, a materials science company with headquarters in Midland, will operate the petrochemical and plastics business where Dow is making most of the investments.