MIDLAND, Mich., May 11 (Reuters) - Dow Chemical Co. (NYSE:DOW - news), the second-largest U.S. chemical company, announced a dividend hike on Thursday and said it expects to cut $1 billion in costs by the end of 2003, while sales more than double to $60 billion by 2010.
Dow Chemical Chief Executive Officer William Stavropoulos said he expected annual sales for the Midland, Mich.-based company to grow from $19 billion in 1999 to $25 billion with the addition of Union Carbide Corp. (NYSE:UK - news) after the takeover is approved. Sales will grow to $34 billion by 2002 or 2003 and to $60 billion by 2010 through growth, new products and further acquisitions, he told reporters following the Midland, Mich.-based company's annual meeting here.
"If you look at what's in our new product pipeline, if you look at our underlying growth of our base business, we think we can get to this $60 billion by 2010,'' Stavropoulos said.
The company intends to cut expenses by $1 billion by the end of 2003, largely through eliminating costly errors and defects. That's in addition to the $500 million in cost cuts from the takeover of Union Carbide. Dow Chemical expects to receive U.S. regulatory approval for the deal by the end of the second quarter in June. "We feel by just ongoing, continuous improvement in our manufacturing operations, in our administrative functions, eliminating errors, we can get that kind of productivity."
By Michael Ellis