Company will divest low-margin segments to improve efficiency and focus on higher value specialities
Dow Chemical has unveiled plans to sell its chlorine business assets – worth a total of $5 billion (£3.1 billion) in annual revenue – to make room for future spending. Around 2,000 employees located in the US, Germany and around the world at will find themselves under new management, as the company sells assets involved in making chlorine and related chemicals, such as its epoxy resin and chlorinated organic segments.
This is the latest in a series of moves by Dow to divest its less-efficient operations that provide low-margin commodity products subject to volatile and cyclical demand. The company hopes that different owners can meet the demands of its former markets by maximising the value of these businesses themselves, while it focuses on increasing shareholder return.
The news of a portfolio shuffle may not come as a huge surprise, as Dow’s biggest rival in the US chemical market, DuPont, has been following a similar strategy. In October, DuPont said it would spin out its speciality chemicals division, which produces titanium dioxide and fluorinated organics, among other products.