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Escalating Feedstock Prices Continue to Compress Margins for Epoxy

Published on 2004-02-27. Author : SpecialChem

MIDLAND, Mich. - (February 27, 2004) - The Dow Chemical Company says that rising and volatile feedstock costs are continuing to put severe pressure on epoxy producers moving into 2004.

Patrick Ho, newly appointed business vice president of Epoxy Products and Intermediates (EP&I), says, "We are encouraged by the improving 2004 supply/demand outlook for epoxies. However, the epoxy industry is experiencing tremendous pressure on cost due to rising oil and energy costs. An immediate focus for Dow is to improve the quality of the business by restoring profit margin to a sustainable level. Looking ahead, we anticipate epoxy pricing improvement across all geographies, with the Pacific region being a first priority, primarily driven by increases in demand, raw material and energy costs."

Ho added, "Dow remains committed to the epoxy industry and to providing high-quality products for our customers. With acquisitions and new plants, Dow has invested considerably in the industry reflecting the strategic importance of this business and our long- term commitment to it."

In 2001, Dow announced its acquisition of Pacific Epoxy Co., Ltd., a manufacturer of converted epoxy resins in the Republic of Korea. Dow also started up a 41,000 metric tons per annum converted epoxy resin plant in Zhangjiagang, People's Republic of China, during the second quarter, 2003.

Ho outlined some priorities for the EP&I business in 2004. Along with improving margins, the business has placed an emphasis on responding to shifting patterns of economic growth and emerging epoxy technologies. "Along with being well positioned to support growth in Asia Pacific, we are looking carefully at a number of growth areas for epoxy resins and are identifying ways to provide more value downstream to customers and end-users," said Ho. "There are areas of enormous potential in the epoxy industry and Dow is committed to being the industry leader."

Prior to being named global business vice president of EP&I earlier this year, Ho served as president of Dow Pacific. He joined Dow in Hong Kong in 1978, and has served in a variety of management positions with polystyrene, polyolefins and polyurethanes.

Dow is a leader in science and technology, providing innovative chemical, plastic and agricultural products and services to many essential consumer markets. With annual sales of $33 billion, Dow serves customers in more than 180 countries and a wide range of markets that are vital to human progress, including food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of sustainable development, Dow and its approximately 46,000 employees seek to balance economic, environmental and social responsibilities. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.

Source: Dow Chemical


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