Dow Chemical’s Indian R&D centre plan faces social boycott

Domain-b, 05 December, 2007
Mumbai: Dow Chemical Co, the new owner of the infamous Union Carbide, is planning a comeback by setting up a research and development centre in India, but is facing stiff opposition from social groups and prospective employees.
Dow has offered to invest $100 million (about Rs400 crore) in a global R&D centre in India. The company has also signed a memorandum of understanding with the Maharashtra government, reports said.
Dow is planning to shut a number of plants in the US and shift production to India and other low-cost locations, to cut costs.
Union Carbide, that caused the death of over 5,000 and left several thousands permanently disabled in the Bhopal gas tragedy, was declared an absconder by a court in Bhopal in 1991. The company was taken over by Dow Chemical in 2001. Dow has refused to produce Union Carbide in court, even while providing an avenue for Carbide to continue profiting from sales in the Indian market without threat of arrest.
With the help of industry leaders like Ratan Tata and Mukesh Ambani, Dow has managed to win the favour of the Prime Minister””s Office which has promised to write off Dow””s liabilities in Bhopal if the company invests heavily in India.
The company, however, is now facing social boycott in the country.
Young engineers of the Indian Institutes of Technology (IITs) are rejecting lucrative jobs at Dow Chemical on moral grounds. They are writing to their IITs to remove its name from the recruiters”” list, reports quoting NGO sources said.
IIT Madras and IIT Bombay had cancelled their prospective engagements with Dow. Now students from IIT Kanpur have followed suit, on the 23rd anniversary of Bhopal gas disaster, the report said.
Meanwhile, the Central Bureau of Investigation has recently raided Dow””s offices across the country for allegedly bribing officials to the tune of millions in order to get licences to sell their products here.
The US Securities Exchange Commission had also fined Dow for financial irregularities. In February 2007, Dow Chemical was fined $300,000 (about Rs1.2 crore) by the SEC for having paid Rs80 lakh as bribe to Indian officials to licence Dursban, a pesticide that was banned in the US because of its harmful effects on children””s brains.
The company continues to market this pesticide in India with impunity.
Meanwhile, in Chennai, more than 150 children in their teens gathered at the central lobby of the Citi Center mall to demand the
eviction of Dow Chemical from the premises.
Dow Chemical, the new owner of Union Carbide, has an office in the 6th floor of the mall in the Mylapore area of the city.
The children also threatened to boycott the “unethical” mall and persuade their friends to do the same if Dow was allowed to continue using the mall premises.
Dow, which has been affected by soaring hydrocarbon feedstock and energy costs, has been attempting to improve its earnings through a series of joint ventures and by expanding its more profitable specialty businesses.
Midland, Michigan-based Dow has been under pressure from investors to announce a transformational deal that would reduce its exposure to the more cyclical and low-margin commodity chemicals business.
Dow said it would exit the automotive sealers business in North America, Asia Pacific and Latin America within nine to 18 months and explore strategic options for its Europe business.
It will also shut down its manufacturing facility in Lauterbourg, France. The company will also write down an investment in its Petromont and Co polyethylene joint venture in Canada. Polyethylene is a very common plastic used for bags.
Dow will also idle a styrene plant in Camacari, Brazil, from January 1, amid tougher competition and weak industry fundamentals.

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