Sadara Joint Venture Begins Polyethylene Production
The Dow Chemical Company today announced that its joint venture in the Middle East – Sadara Chemical Company (Sadara) – has achieved a key milestone of first polyethylene production, meeting previously announced targets to begin production by year-end 2015. This landmark investment has been a key pillar of Dowfs targeted, strategic growth actions over the last several years, and supports the Companyfs strategy to enable cost-advantaged growth in fast-growing regions such as Asia Pacific, the Middle East, Africa, India, and Eastern and Central Europe. Sadara is a joint venture developed by Dow and Saudi Arabian Oil Company (Saudi Aramco).
gSadara is a significant chapter in Dowfs consistent and deliberate drive towards targeted, high-margin markets, and todayfs milestone is the latest milestone in a new era of transformative growth,h said Andrew N. Liveris, Dowfs chairman and chief executive officer. gThe Sadara joint venture is an extraordinary collaboration that builds upon the unique strengths of its parent companies to deliver a performance-focused portfolio to drive this global growth, and this investment is further demonstration of Dowfs commitment to deliver consistent, long-term earnings growth and reward our shareholders.h
Sadarafs 26 manufacturing assets remain on schedule for a sequenced start-up process, beginning with the polyolefins envelope to maximize timing in the ethylene cycle, followed by ethylene oxide/propylene oxide and their derivatives.
With commitments from global customers for the full output of the polyethylene units, excitement continues to increase as Dow businesses actively engage in pre-marketing activities and prepare to sell the majority of products produced by Sadara Chemical Company via agreements with the joint venture, to support growth throughout the emerging world in key markets such as packaging, construction, electronics, furniture and bedding, automotive and transportation.
gThis milestone represents a new era of growth, as Dow will be able to deliver a technology-rich product portfolio to emerging markets with greater speed. Our customer base is eager for this new volume, and we are pleased to be able to support our customerfs growth in geographies that will benefit from Sadarafs close proximity,h said Diego Donoso, business president, Dow Packaging and Specialty Plastics.
The performance-focused product portfolio will add new value chains to the Kingdomfs vast petroleum reserves, resulting in the diversification of the economy and region.
Dow to Potentially Increase Equity Ownership in Sadara to 50 Percent Sadara will add new value chains to Saudi Arabiafs vast petroleum reserves, resulting in the diversification of the economy and region
gSadara is the result of a game-changing partnership between Saudi Aramco and Dow by delivering market-driven solutions that support the diversification of the countryfs economy,h said Andrew Liveris, Dowfs chairman and CEO. gIncreasing our equity stake in this iconic joint venture is a powerful example of our strategic partnership with Saudi Aramco and is yet another accelerator in Dowfs long-term growth strategy designed to capture growing consumer-led demand in our key end-markets of transportation, infrastructure, packaging, and consumer products in developing regions.h
Saudi Aramco President and CEO Amin H. Nasser said, gWe are proud of our partnership with Dow given its preeminent stature among the worldfs leading chemical companies. Dowfs larger stake in Sadara is an endorsement of the Kingdomfs vibrant ecosystem, and signals Dowfs confidence in our partnership as a model of mutually beneficial foreign direct investment. The time is right to fully leverage Dowfs global leadership to further contribute to the Kingdomfs economic transformation in line with Vision 2030.h
potential equity equalization would occur
following the later of two events\
(i) the intended separation of the Materials Science Company, within 18 months after the close of the merger of equals between Dow and DuPont on August 31 and
(ii) Sadarafs completion of the Creditorsf Reliability Test, which is part of the limited-recourse financing used to fund the Sadara project development.
The anticipated financial impact of the potential transaction is not being disclosed. The Sadara financial structure and governance remain unchanged.
The Sadara chemical complex\the largest of its kind ever built in a single phase\is currently operating all of its 26 world-scale units that manufacture a portfolio of valued-added performance plastics and specialty chemicals. The more than three million metric tons of performance-focused products serving the Packaging, Transportation, Infrastructure and Consumer markets will add new value chains to Saudi Arabiafs vast hydrocarbon reserves, resulting in the diversification of the economy and region.