Dow Chemical 2013 Annual Report Download - page 34

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The segment strategically locates its polyethylene production units near its hydrocarbon cracking facilities to enable back-
integration into feedstocks. As a result, the segment sources ethylene primarily from internally produced sources and propylene
from both internal and external sources. In 2013, the Performance Plastics segment consumed 71 percent of Dow's internal
ethylene production.
Competition
Competition for the Performance Plastics segment includes chemical divisions of major national and international oil
companies, which provide competition in the United States and abroad. Dow competes worldwide on the basis of product
quality, product supply, technology, price and customer service. Performance Plastics will continue to benefit from an
advantaged feedstock position, including favorable shale gas dynamics in the United States, which will further strengthen the
Company's low-cost position and enhance global cost competitiveness. Key competitors include ExxonMobil, INEOS,
LyondellBasell, Mitsui and SABIC.
Joint Ventures
Joint ventures play an integral role within the Performance Plastics segment by dampening earnings cyclicality and improving
earnings growth. Key joint ventures are listed below:
Aligned 100 percent with Performance Plastics
• Univation Technologies, LLC - a United States-based company that develops, markets and licenses the
UNIPOL™ polyethylene process technology and related catalysts, including metallocene catalysts; owned 50
percent by the Company.
Performance Plastics includes a portion of the results of:
• EQUATE Petrochemicals Company K.S.C. - a Kuwait-based company that manufactures ethylene, polyethylene
and ethylene glycol; owned 42.5 percent by the Company.
• The Kuwait Olefins Company K.S.C. - a Kuwait-based company that manufactures ethylene and ethylene glycol;
owned 42.5 percent by the Company.
• The SCG-Dow Group consists of Siam Polyethylene Company Limited - owned 50 percent; Siam Polystyrene
Company Limited - owned 50 percent; Siam Styrene Monomer Co., Ltd. - owned 50 percent; and Siam Synthetic
Latex Company Limited - owned 50 percent. These Thailand-based companies manufacture polyethylene,
polystyrene, styrene and latex.
• Sadara Chemical Company - a development-stage Saudi Arabian company that will manufacture chlorine,
ethylene and propylene for internal consumption and will produce and sell high-value added chemical products
and performance plastics; owned 35 percent by the Company.
Divestitures
On December 2, 2013, the Company sold its Polypropylene Licensing and Catalysts business to W. R. Grace & Co. On
September 30, 2011, the Company sold its global Polypropylene business to Braskem SA. Both businesses were reported in the
Performance Plastics segment through the date of divestiture.
Future Investments
During 2013, the Company announced the location of four new Performance Plastics production units to be built on the U.S.
Gulf Coast. Leveraging an advantaged feedstock position from U.S. shale gas, these production units will support expected
profitable growth of the Company's high value Performance Plastics franchise. The businesses, production units and locations
impacted are as follows:
• Dow Packaging and Specialty Plastics: An ELITE™ polymer production unit will be built in Freeport, Texas; and
a Low Density Polyethylene (LDPE) production unit will be built in Plaquemine, Louisiana.
• Dow Elastomers: A NORDEL™ metallocene EPDM production unit will be built in Plaquemine, Louisiana; and a
High Melt Index (HMI) AFFINITY™ polymer production unit will be built in Freeport, Texas.