Dow to exit chlorine business

The Dow Chemical Company detailed the scope of its exit from a significant portion of its chlorine business. The assets in this business represent up to $5 billion of total annual revenue, inclusive of sales on the merchant market and sales, and is being eyed to support Dow’s downstream, value-added products. The scope includes approximately 40 manufacturing facilities at 11 sites, and nearly 2,000 employees.

The announcement represents the continuation of the company’s shift toward more profitable products and technologies.  It also outlines a clearly defined scope of businesses that are located in attractive regions and are backed by a low-cost energy position attractive for producers of chlorine-based chemicals such as caustic soda and PVC. Further, they are coupled with businesses that command industry-leading positions with world-scale assets and global capabilities.

In addition, the company also announced that it will shut down approximately 800,000 tons of chlorine and caustic equivalent capacity in Freeport, Texas. The capacity being shut down will be replaced with supply from new facilities that will come online with the start-up of the Dow Mitsui joint venture in early 2014. The shutdowns will help maintain Dow’s balances and will be coordinated with the start-up of the joint venture.

In the past 12 months, Dow has completed or announced transactions totaling $700 million, including the recently announced definitive agreement to divest its global Polypropylene Licensing & Catalysts business. In anticipation of this separation, the Company announced in October it had expanded its divestiture target to $3 billion – $4 billion in proceeds over the coming 18 to 24 months. In line with the company’s stated commitments, Dow expects to direct proceeds of these transactions toward increasing shareholder remuneration, organic growth investments and additional interest expense reductions.