Dow posts elastomers record amid mixed annual results

Midland, Michigan – Dow Chemical Co.’s performance materials & chemicals unit saw sales fall 23% in full year 2016 to just over $9.2 billion (€8.6 billion), the speciality chemicals company reported on 26 Jan.

Measured on earnings before interest, taxes, debt and amortisation (EBITDA), performance materials & chemicals plummeted 97% to $134 million.

There were, however, some bright spots, not least the US group’s elastomers business which achieved record quarterly and full-year sales volumes.

Strong growth at Dow Elastomers was led by double-digit hikes in demand in both Asia Pacific and EMEA. This was propelled by automotive and footwear end-markets, according to the Midland, Michigan-based company.

Elsewhere, Dow’s polyurethanes unit posted year-on-year volume-growth for the 15th consecutive quarter. Last year, it noted, saw double-digit increase in demand for downstream, higher-margin systems applications.

Overall, though, performance plastics EBITDA slipped almost 17% to $4.5 billion, while performance materials & chemicals plummeted 97% to $134 million.

According to Dow, selling prices for materials made by performance plastics fell 8% during 2016, with performance materials & chemicals down 9% in that category.

Dow's overall company sales for 2016 fell more than 1% to around $48.2 billion. The firm's annual profit slumped 43% to $4.4 billion.

Nevertheless, Dow chairman and CEO Andrew Liveris sounded an upbeat note: “We delivered full-year operating EBITDA records in multiple downstream businesses, including Automotive Systems, Building & Construction, Electronic Materials and Dow AgroSciences."

“Strategically, we advanced our growth investments. Sadara completed construction of its world-scale site, celebrated startups of its largest units and began ramping production of its 26 operating units.

Liveris went on to say that Dow had "accelerated the integration of Dow Corning silicones, surpassing all of our value and synergy capture targets and capitalising on the business’s natural fit within Dow’s portfolio."

Meanwhile, Dow's pending merger with Wilmington, Delaware-based DuPont Co. is expected to be completed in the first half of 2017. The combined entity then plans to split into three separate publicly traded companies, including one focused on materials, within two years of the completion date.

On Wall Street, Dow's per-share stock price began 2016 around $51.70 and had climbed to $58.40 by the end of the year, for an increase of 13%. It had risen further to $61.30 in early trading 26 Jan.

(Frank Esposito from ERJ sister title Plastics News contributed to this story)