23:41 PM | March 18, 2013 | —Vincent Valk
Dow Chemical says it plans to raise as much as $1.5 billion from divestitures over the next 18 months, including sales of its polypropylene licensing and catalysts business and plastic additives business. The polypropylene licensing and catalysts unit sells polypropylene (PP) production technology, including Unipol process technology and catalysts. The plastic additives sells additives for the processing and modification of thermoplastic and thermosetting resins used in construction materials, packaging, consumer appliances, and other applications.
Dow announced in December that it was adjusting strategy to a “slow-growth world” with a program for over $3 billion in cost savings and divestitures. The latest divestiture announcement “is yet another proof point of Dow’s rigorous focus on return on capital, and is squarely in line with commitments we made earlier this year,” says Dow chairman CEO Andrew Liveris.
The PP licensing and catalysts business is a part of Dow’s performance plastics segment, which recorded $14.5 billion in sales in 2012. That figure was down 10.5% year-on-year from 2011. The segment recorded $3 billion in Ebitda, down 11.8%. The plastic additives business is part of Dow’s performance materials segment, which recorded $13.6 billion in sales in 2012, down 6.8% from 2011. The segment recorded $1 billion in Ebitda, down 41.2%.
Dow sold its tin stabilizers business to PMC (Mount Laurel, NJ) in January. Also in January, Dow agreed to sell its 50% stake in Nippon Unicar, a polyethylene joint venture in Japan.
“We are reviewing our entire portfolio and seeking even further opportunities to optimize value and selectively pruning assets that are no longer a strategic or financial fit,” Liveris says.
Dow has divested businesses worth about $8 billion in revenue since its 2009 acquisition of Rohm and Haas.