Dow Jones Market Watch, October 24, 2006
BANGKOK (MarketWatch) — Dow Chemical Co. (DOW) will move ahead its plan with Siam Cement PCL (SCC.TH) to set up a key ethylene cracker in Thailand on the eastern seaboard.
The planned cracker, which will be operational in 2010, will have an annual ethylene output capacity of 900,000 metric tons and a yearly propylene production capacity of 800,000 tons, Vorapong Vorasuntharosoth, Dow Chemical’s spokesman for Southeast Asia, said Tuesday.
The cracker, to be Dow Chemical’s second in Thailand, will help drive the growth of Dow’s businesses across Asia, the company said in a statement last week. Dow Chemical previously invested in a 800,000-ton-a-year ethylene cracker operated by Siam Cement.
Dow Chemical will own a share totaling 33% in the project through direct and indirect stakes, while Siam Cement will hold the remaining stake of 67%.
“This project strengthens the company’s presence in Asia Pacific and provides a competitive platform on which to develop a range of higher margin business opportunities,” said Dow Chemical Chairman and Chief Executive Andrew Liveris.
The ethylene and propylene produced will be supplied to its downstream projects, which will be jointly invested with Siam Cement, Vorapong said, including a hydrogen peroxide-to-propylene oxide (HPPO) plant and a facility producing a range of propylene oxide derivatives.
The project value is still under review. Earlier this year, Siam Cement stated in its annual report that the investment value of the project would be THB44 billion ($1.18 billion), while the downstream projects would cost THB16 billion ($430 million).
Propylene oxide is used to make propylene glycol, polyurethanes and glycol ethers.