Dow Seeks Partners

In a bid to reduce earnings cyclicality, Dow Chemical is setting in motion plans to find joint-venture partners for its polypropylene and polystyrene operations while boosting its performance-based chemical businesses.

"Our goal is to generate earnings growth and earning consistency over the short term and the long term," CEO Andrew N. Liveris said during the firm's quarterly earnings conference call late last week. To help achieve that goal, the firm is now seeking partners for its polypropylene and polystyrene operations that can offer additional strengths such as "further back-integration in feedstocks or expanded geographic presence."

Formation of ventures in those two businesses would further what Liveris refers to as Dow's "asset-light" strategy, intended to reduce capital investments, retain Dow's traditional site and product integration advantages, and still maintain operational control. "Stay tuned for some bold new moves in our basics portfolio," Liveris told those at the conference call meeting.

As Dow tries to lighten up on its traditional chemical operations, it is taking additional steps to build up performance chemicals operations in promising markets. Liveris announced two new "market-facing" business platforms: one in coatings and the other in footwear.

The coatings platform would gather technologies from across Dow, such as recently launched amine- and polyurethane-based materials, and direct them at the $40 billion global coatings industry, Liveris said. And the footwear platform would enable Dow to apply technology in adhesives, urethanes, and specialty polymers to the $20 billion footwear industry.

Dow, which already has four market-facing platforms in building products, automotive materials, agro sciences, and water treatment, is "evaluating 12 additional market-facing opportunities," Liveris said. The firm is unlikely to launch all 12 new platforms, he cautioned. But Dow does expect to launch some of the new platforms later this year.