Dow, Mitsui In Cl₂ Pact

Dow Chemical and Mitsui & Co. are forming a 50-50 joint venture to build a chlor-alkali plant in Freeport, Texas, with a chlorine capacity of 800,000 metric tons per year. The partners expect to begin construction on the plant in the fourth quarter and complete it in 2013. Dow originally had planned to build a new chlor-alkali unit of its own in Freeport by 2011 but canceled the project in early 2009. Mitsui says it is investing $140 million in the new project. Dow, on the other hand, will put up a minimal amount of cash because it already invested in engineering the earlier project. Dow CEO Andrew N. Liveris says the new plan is consistent with the company’s asset-light strategy of finding partners for capital-intensive investments in basic chemicals. “This strategic joint venture bolsters our integration strength while also liberating capital for investment in businesses that are technology- and customer-driven with higher, more consistent earnings,” he says. Under a tolling arrangement, Dow will convert Mitsui’s share of the chlorine into ethylene dichloride, which Mitsui will sell on the international market.