The Dow Chemical Company DOW declared that its joint venture (JV) in the Middle East, Sadara Chemical Company, has started the operations of its mixed feed cracker (“MFC”), marking an important milestone for the JV. Sadara is a JV between Dow and Saudi Arabian Oil Company (“Saudi Aramco”).
Sadara is in line with Dow Chemical’s initiative to grow in the Asia Pacific, Middle East, India, Africa as well as Eastern and Central Europe with cost advantages. The company aims to expand in markets including packaging, electronics, construction and transportation. The startup of the MFC marks an important step in realizing the full value of this state-of-the-art, global integrated complex, which is geared to provide emerging economies with differentiated and high-value plastics as well as specialty chemical products.
Sadara’s Jubail Industrial City II complex will comprise 26 production assets, including the MFC. The MFC will manufacture ethylene and propylene which will then be converted into other plastics and chemicals in the facility. The facility already caters to nearly 100 customers spread across more than 25 countries. Sadara is progressing toward a start-up process, with the polyethylene and polyolefins envelope to help maximize timing in the ethylene cycle, and thereafter, ethylene oxide and propylene oxide along with their derivatives.
Dow Chemical’s shares closed around 0.9% higher at $54.13 on Aug 29.
Dow Chemical topped earnings expectations in second-quarter 2016, aided by cost-cutting and productivity actions. The U.S. chemical giant registered adjusted earnings (barring one-time items) of 95 cents per share for the quarter that outpaced the Zacks Consensus Estimate of 85 cents. On a reported basis, the company logged profit of roughly $3.1 billion or $2.61 per share, an almost three-fold surge from a profit of around $1.1 billion or 97 cents per share recorded a year ago. The bottom line was boosted by a sizable gain associated with the Dow Corning ownership restructuring.
Dow Chemical is expected to continue gaining from its productivity improvement and cost control initiatives. Moreover, the company remains committed to invest in attractive regions through highly-accretive projects including the expansions in the U.S. Gulf Coast and the Sadara JV.
Source : finance.yahoo.com