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Dow and PIC of Kuwait Continue Progress on Proposed $11B Joint Venture

Published on 2008-07-17. Author : SpecialChem

Midland, MI and Kuwait City, Kuwait -- The Dow Chemical Company and Petrochemical Industries Company of the State of Kuwait, a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC), continue to make progress on their $11 billion proposed 50:50 joint venture. The two companies named James R. Fitterling the chief executive officer of the new market leading global company - K-Dow Petrochemicals (KDP). Dow and PIC also announced the selection of Michigan as the location of the world headquarters for the new joint venture, subject to the approval of state and local incentives and the completion of definitive agreements, customary conditions, regulatory approvals, and transaction close, which is anticipated in late 2008.

James R. Fitterling Named CEO

Fitterling is currently the business group president for Dow Basic Plastics and a member of the Company's Management Committee and Business Operations Committee. He has held a variety of key leadership positions during his 24-year career with Dow. Fitterling will become CEO when the joint venture begins operations.

"Jim's vast experience with Dow and the industry, in the basic plastics businesses, several joint ventures, international assignments, and executive leadership roles are the ideal qualifications Dow and PIC sought in a leader for K-Dow Petrochemicals," said Andrew N. Liveris, Dow chairman and CEO.

Michigan Selected for Headquarters

The city location for the headquarters is still to be determined; however the venture will be located in southeast Michigan, pending final incentive approvals, which offers convenient international airport access as well as a broad range of educational opportunities and culturally diverse communities. The total number of employees located at the headquarters site is expected to expand up to 800 employees over the next several years.

"For decades The Dow Chemical Company has been an important part of Michigan's economy by creating jobs and investing in our communities," said Governor Jennifer M. Granholm. "K-Dow Petrochemicals, which will bring hundreds of jobs to our state, would rank in the top half of the Fortune 500 if it was publicly traded, and the fact that it will be headquartered here is good news for Michigan."

"From PIC's perspective, we were especially impressed by the welcoming attitude and innovative spirit toward this new global enterprise shown by the state of Michigan," said Maha Mulla Hussain, Managing Director of PIC. "The selection process was thorough and thoughtful, and Dow and PIC made the decision together based on the location that could best support the JV's success."

Liveris also characterized the companies' joint selection of the headquarters location as "consistent with the positive business environment in the state of Michigan, where Dow has more than 110 years of history."

"Dow and PIC chose Michigan for the global headquarters based on criteria related to the state and region's access to international markets, presence of a talented and culturally diverse workforce, and attractive business environment," said Liveris.

About K-Dow Petrochemicals (KDP):

The name K-Dow Petrochemicals (KDP) reflects the combined strengths of the JV partners that together will create a market-leading, global petrochemicals company. Dow's strengths are its recognized brand and franchise related to product and market leadership -- including its number one position in polyethylene, ethyleneamines and ethanolamines -- as well as technology development and operational expertise. The venture will continue to maintain Dow's strong commitment to compliance with environmental, health and safety standards.

K stands for Kuwait and represents both Petrochemical Industries Company (PIC) of Kuwait's feedstock position and commitment to global petrochemicals growth and the position of PIC's parent company Kuwait Petroleum Corporation (KPC) as one of the world's top-ten energy/hydrocarbons companies.

About the Products in the Venture:

The venture will manufacture and market polyethylene (PE), ethyleneamines, ethanolamines, polypropylene (PP), and polycarbonate and related licensing and catalyst technologies. PE and PP comprise more than half of world polymer demand. PE is the most widely used of all plastics and can be found in everyday products from food packaging, milk jugs and plastic containers to pipes and liners. PP is a versatile plastic used in fibers, packaging films, non-wovens, durable goods, automotive parts, and consumer applications. Polycarbonate is an engineering thermoplastic used in applications such as optical media, electrical and lighting. Amines are a family of chemicals with a broad range of properties, used in various applications from wood treating and pharmaceutical processing, to coatings and consumer products.

About Dow:

With annual sales of $54 billion and 46,000 employees worldwide, Dow is a diversified chemical company that combines the power of science and technology with the " Human Element " to constantly improve what is essential to human progress. The Company delivers a broad range of products and services to customers in around 160 countries, connecting chemistry and innovation with the principles of sustainability to help provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.

About Petrochemical Industries Company::

As part of the Kuwait Petroleum Corporation family, PIC is at the heart of the national strategy to maximize the value of Kuwait's hydrocarbon resources, and is focused on increasing its petrochemical contributions. It is focused on strategic growth inside and outside Kuwait through diversification, further use of strategic alliances, as well as pursuing successful joint ventures such as EQUATE, GPIC and MEGlobal.

About Kuwait Petroleum Corporation:

Kuwait Petroleum Corporation (KPC) is the state-owned entity responsible for Kuwait's hydrocarbon interests throughout the world. As part of the global energy industry, we help to supply the world with its vital oil and gas needs by exploring for, producing, refining, transporting and marketing these precious natural resources both in our home country and internationally.

Source: Dow


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