Odds And Ends From Dow’s Dog And Pony Show
Dow’s investor day during the first week of November yielded a wealth of C&EN stories for me. I wrote a Latest News and News of the Week on the company possibly splitting up its polyolefins enterprise. I alluded to its timing on its Chinese coal to chemicals project in another News of the Week piece. And the next issue of C&EN will have a feature story on its Rohm and Haas progress.
Here are some impressions and tidbits that won’t make it into the magazine but I still think are worth noting.
1) Dow CEO Andrew N. Liveris is not without his talents. CEOs of chemical companies often bring unique skills to their jobs. Jon M. Huntsman, for instance, is one of the industry’s best negotiators. Liveris is at his best when he is moving his lips. He is a salesman of first rank. When you ask him a tough question, he acts as if he woke up that morning hoping someone would ask him that.
2) Even Andrew Liveris can be stumped. A reporter from Michigan Public Radio asked him about hypocrisy of investing in solar cells and lithium batteries in the U.S. while pursuing coal-to-chemicals in China. Liveris wobbled to his feet muttering things about best practices, Responsible Care, and planting lots of elm trees.
3) Liveris isn’t excited about the pace of U.S. recovery. Coming as it did one the eve of election day, Liveris fielded questions about the economy and what he thought about policy. “I have done 22 overseas trips this year and I gotta tell you, including Europe, I’m excited when I go,” he said. “When I come back here, I feel depressed. The U.S. does feel very different. The U.S. is mired in uncertainty. The lack of clarity out of our political agenda is causing business to stay on the sideline.”
4) Liveris has been right about the polyethylene market cycle. “Industry pundit forecasts for 2011 are too barish,” he said. Supposedly, an onslaught of capacity in the Middle East was to bring a blow from the supply side to the ethylene chain. As it turns out, a strong global rebound in demand and problems bringing on the new capacity for various reasons—inability to coordinate with feedstocks, high construction costs, renewed embargo emphasis on Iran—are dampening the impact. Not to mention that North America is one of the cheaper marginal producers because of shale-based gas.
5) No word on costs for the Aramco project. I tried to get this out of him. Back when the massive complex was planned for Ras Tanura, pundit estimates were as high as $20 billion. The partners are moving the project to Al Jubail, where there is more existing infrastructure. At the conference, Liveris said the partners would wrap up engineering work next year. But while he would put the size of the project in the “double digit” billions, a more precise number will have to wait until the front end work is completed. Owing to the new venue and the mid-cycle nature of the project, I would expect the cost to be much less than the most grandiose estimates.
6) Dow’s Powerhouse shingles get UL certification. OK, the Underwriters Laboratories signing off on Dow’s CIGS photovoltaic panels might not seem earth shattering. But in the construction world, anything that allows them to be specified into building codes and the like is important. I toured the pilot facility making the cells in Midland. They do seem durable and easy to install. I also saw the panels installed on a house. They really are harder to notice than conventional silicon photovoltaics.
7) Less TiO2 in paints. Dow has new “polymer technology” that it says can reduce titanium dioxide in solvent-borne alkyd architectural paints by as much as 15%. The company already has opaque polymer technology in water-borne latex paints. The company says the technology results in lower volatile organic compounds and is cost effective. I suppose this is because fewer coats are needed due to the additional hiding power.
8) Dow expanding trimethyl gallium. The company is opening a plant for the LED precursor in Korea, part of plan to expand capacity of the stuff by 60 metric tons per year in that country and in the U.S. I chatted with chief technology officer Bill Banholzer. He explained to me that the program is an example of synergy between Dow and Rohm and Haas. Basically, Dow was able to scale up production beyond the near lab-scale that was normal under Rohm and Haas, yielding a 65% decrease in capital intensity.