Dow In Sharp Focus

With its acquisition of Rohm and Haas, Dow Chemical now has the critical mass it needs to concentrate more on high-growth, value-added chemistry than on commodity chemicals, said CEO Andrew N. Liveris at a Nov. 12 investor conference.

“This is not your father’s or mother’s Dow Chemical Co.,” Liveris told the group of analysts and investors at the New York City meeting. He pledged that Dow will increase revenues by more than 10% per year and before-tax profit margins by 12–20%.

As an example of the company’s new direction, Liveris said, Dow is more likely to be an “investor” than a “divestor” of its AgroSciences unit. Earlier this year, he hinted that he might sell the unit. At the meeting, Dow unveiled a licensing agreement with DuPont’s Pioneer Hi-Bred seed unit for a herbicide-tolerant soybean trait that Dow is developing. In return, DuPont is licensing its Optimum GAT herbicide-resistant trait for soybeans to Dow.

Alternative-energy R&D was another big focus of the investor presentation. The company touted a research collaboration with Caltech on thin-film photovoltaics. The organizations will look for “Earth-abundant” elements that could supplement the copper-indium-gallium-selenide thin-film photovoltaics used in the Powerhouse Solar Shingle that Dow unveiled last month (C&EN, Oct. 5, page 25).

Dow plans to make $2 billion in divestitures in 2010, on top of the $3.4 billion in assets it sold in 2009, Liveris noted. The company has identified 10–15 nonstrategic businesses, ranging in annual revenues from $100 million to $300 million, that it may sell over the next year. In addition, it is planning to sell Styron, a subsidiary it recently formed to house some of its styrenics businesses. It is also discussing with two companies options for its basic chemicals business. Dow’s proposed joint venture for this business with Petrochemical Industries Co. of Kuwait fell through late last year.

Investors like what they heard. On the day of the briefing, Dow shares jumped 7% to close at $28.60. Citigroup analyst P. J. Juvekar was impressed. “We were pleasantly surprised with the new products coming out of Dow’s R&D pipeline,” he wrote after the meeting.

Chemical & Engineering News

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