Monday, Jul 25, 2011
DOW JONES NEWSWIRES
Dow Chemical Co. (DOW) disclosed plans to build and operate a $20 billion Saudi Arabian chemicals complex in partnership with Saudi Arabian Oil Co., a move the companies said would create one of the world's largest integrated chemical facilities.
Construction on the complex is scheduled to begin immediately, with the first production units coming on line in the second half of 2015. All 26 manufacturing units in the complex are expected to be fully operational in 2016.
"This premier partnership is the right economic ownership model with the right partner," Dow Chief Executive Andrew N. Liveris said. "It is designed to capture growth in the rapidly growing sectors of energy, transportation and infrastructure, and consumer products by creating a manufacturing hub that will provide a differentiated product slate and an advantaged cost position."
The two companies estimated the joint venture, named Sadara Chemical Co., will generate annual revenue of roughly $10 billion within a few years of operation. Sadara will become an equal joint venture between Saudi Aramco and Dow after an initial public offering. The $20 billion investment for the project includes third-party contributions.
Dow, the largest U.S. chemical producer by revenue, has been placing greater emphasis on specialty chemicals and materials. The company, which reports its second-quarter results later this week, has shown an improvement in earnings lately due to stronger demand and price increases.
Dow shares closed Friday at $35.58 and were inactive premarket. The stock is up 4.2% since the start of the year.
-By Mia Lamar, Dow Jones Newswires; 212-416-3207; mia.lamar@dowjones.com
(END) Dow Jones Newswires
25-07-11 1124GMT
