The Dow Chemical Company
) announced that it will invest in a coatings manufacturing plant
in Saudi Arabia for boosting domestic and export markets. Dow
intends to invest in the facility in Jubail Industrial City for its
Dow Coating Materials ("DCM") business unit.
DCM is the premier supplier of products and technologies to
architectural and industrial coatings manufacturers. As per the
company, the investment will provide customized and advanced
materials for the people of Saudi Arabia.
The company aims to cater to the regional customers by investing
in Saudi Arabia and thus achieve its regional objectives. The
company will also create employment opportunities in Saudi Arabia
while enabling people in that country to instill sustainable
policies and practices in the industry.
Dow also entered into another agreement with Saudi Aramco in
July 2011 to form Sadara Chemical Company in Jubail Industrial
City, Saudi Arabia. Once operational, Sadara is expected to deliver
annual revenues of approximately $10 billion within a
few years of operation and generate thousands of direct and
indirect employment opportunities through the complex and related
investments in downstream value parks.
Dow released its fourth-quarter 2011 results in February 2012.
The company earned 25 cents per share, missing the Zacks Consensus
Estimate of 32 cents as well as trailing the year-ago earnings of
47 cents. However, including one-time charges, the company reported
a loss of 2 cents per share compared with earnings of 37 cents in
the year-ago quarter.
Though total revenues in the quarter inched up 2% to $14.1
billion, it was below the Zacks Consensus Estimate of $14.4
billion. Sales increased across all operating segments and
geographic areas, except Electronic and Functional Materials.
Dow did not provide any financial guidance. The company
anticipates that it will continue facing challenges from Western
Europe in the near term.
The company did not forecast much improvement in market
conditions for first-quarter 2012, but it has projected that
economic recovery will gain momentum in the second quarter and the
remainder of the year. It expects to meet its short and long-term
targets irrespective of the economic conditions.
Dow expects its downstream, market-driven businesses to continue
to capture value from improving North American feedstock dynamics.
The company expects ethylene industry operating rates to tighten
over the next several years, driving margin expansion. The company
will keep its focus on generating enough cash flows while repaying
its shareholders and funding organic growth.
Dow competes with
EI DuPont de Nemours & Co.
). We are maintaining a long-term (more than 6 months) Neutral
recommendation on the stock. Currently, Dow Chemical holds a Zacks
#3 Rank, which translates to a short-term (1 to 3 months) Hold
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