Markets

Dow Chemical Provides Update on Investments, New Products - Analyst Blog

Multiple stacks of coins
Credit: Shutterstock photo

The Dow Chemical Company ( DOW ) announced that it has reached several milestones with its Plastics investments in the U.S. Gulf Coast and Latin America.

Construction work of the projects in the U.S. Golf coast is nearing peak stage and these projects remain on track for start-up. In Freeport, TX, more than 50% of construction for the on-purpose propylene PDH project is complete. The project remains on track to come on stream in mid-2015.

The company's world-scale ethylene production facility also remains on track to come online in first-half 2017. The facility will support market growth and derivative expansion of Dow's industry leading Performance Plastics business.

Apart from the above, Dow will also expand its ELITE franchise which provides increased durability and flexibility for food packaging, hygiene & medical, and industrial and consumer packaging markets. The company will also expand its NORDEL EPDM franchise with next generation technology in Plaquemine, LA, as well as its Low Density Polyethylene (LDPE) family of high performance products like AGILITY.

Once the company's projects become completely operational, Dow's collective feedstock and plastics expansions on the U.S. Gulf Coast are expected to deliver about $2.5 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) annually.

Dow aims at expanding capacities and increasing production technologies and equipment of its polyethylene (PE) production units in Bahia Blanca and Argentina in order to meet the strong demand in consumer and industrial films. These will help the company to produce more high performance resins for flexible and rigid packaging applications to meet growing demand in Latin America.

Another business unit of the company, Dow Building Solutions, has launched LIQUIDARMOR-CM Flashing and Sealant, which is a patented liquid flashing solution made to provide advanced moisture and air sealing protection to commercial buildings. An alternative to flashing tape, the elastomeric spray forms a seamless barrier along the rough openings of windows and doors while helping to considerably reduce labor time.

It provides for an excellent solution for installation of THERMAX or the Ultra Air Barrier Wall Systems. The solution is three times faster than the conventional flashing systems and reduces the overall installation labor time and costly call backs by getting the job right the first time.

Additionally, the Dow Construction Chemicals unit introduced a new high performance 100% acrylic redispersible powder, DLP-500 in North America. DLP-500 provides the benefits of a traditional wet acrylic, with lower shipping and packaging costs. The product is designed especially for Exterior Insulation Finish Systems (EIFS) and stucco finishes.

DLP-500 allows for packaging in bags instead of pails or buckets, which enables cost savings in excess of 60%. Further, without the presence of water, which can represent 50% of a traditional acrylic emulsion, DLP-500 customers can potentially cut their shipping costs and fuel use in half. The product is expected to be launched globally in 2015.

Dow currently carries a Zacks Rank #3 (Hold).

Other stocks in the chemical space worth considering include Celanese Corp. ( CE ), Innospec Inc. ( IOSP ) and Kronos Worldwide, Inc. ( KRO ). All of them have a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DOW CHEMICAL (DOW): Free Stock Analysis Report

CELANESE CP-A (CE): Free Stock Analysis Report

KRONOS WORLDWD (KRO): Free Stock Analysis Report

INNOSPEC INC (IOSP): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CE KRO IOSP

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More