The Dow Chemical Company (NYSE: DOW) and Mitsui & Co., Ltd., of Tokyo, Japan (NASDAQ: MITSY) announced today that the two companies have signed a definitive agreement to form a 50:50 manufacturing joint venture to construct, own and operate a new membrane chlor-alkali facility located at Dow’s Freeport, Texas, integrated manufacturing complex.
This landmark joint venture combines the strengths of two global companies to build a world-scale chlor-alkali plant on the US Gulf Coast.
The facility will be built using Dow's modern and efficient chlor-alkali technology, and takes the place of the previously announced Chlorine 7 project, which was a Dow-only venture.
"This joint venture with Mitsui is another meaningful example of our strategy in action - enabling us to continue to supply building blocks to our downstream performance businesses at lower cost and with less capital," said Andrew Liveris, Dow chairman and chief executive officer. "Dow’s Basic Chemicals business is a world-class manufacturing franchise that delivers unique product and technology integration advantage to our downstream performance and market-driven businesses. This strategic joint venture bolsters our integration strength, while also liberating capital for investment in businesses that are technology- and customer-driven with higher, more consistent earnings."
The new chlor-alkali facility is expected to begin operations in mid-2013, and will have a capacity of approximately 800 kilotons per annum. Dow will operate and maintain the chlor-alkali facility under contract to the joint venture. Construction will begin in the fourth quarter of 2010. The venture will create approximately 50 long-term jobs at the Freeport, Texas, location, as well as approximately 500 construction jobs during the build.
The joint venture’s new chlor-alkali production facility will fuel the growing feedstock needs of Dow’s performance businesses with cost-advantaged chlorine supply.
More than 70 percent of Dow’s chlor-alkali production is used to serve its growing performance and market-driven businesses.
Close of the transaction is expected in the third quarter of 2010, depending upon regulatory approvals and customary closing conditions.