Dow will sell more units

• By GARY PERILLOUX
• Advocate business staff
• Published: Nov 13, 2009 - Page: 6B

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The Dow Chemical Co. said Thursday it would sell more pieces of its business — about $3.5 billion worth — but the sale of its powder coatings and Styron resin divisions shouldn’t diminish jobs or production in Louisiana, company officials said.

In a separate announcement, Dow said it signed an agreement with Denbury Resources Inc., which is building the 320-mile “Green” Pipeline between Donaldsonville and Houston to transport carbon dioxide for enhanced oil recovery.

Dow also predicted earnings would rise from depressed levels of $1.82 per share in 2008 to the range of $4 to $4.50 per share in 2012.

The company’s chief executive, Andrew Liveris, mapped out a strategy to cut company debt by $12 billion in 2010, with $3.5 billion of that announced on Thursday.

Further reductions would come from resolving a failed joint chemical venture with a state-owned company in Kuwait, a deal that had been expected to provide much of the cash for a separately negotiated $16.5 billion April acquisition of Rohm and Haas, a specialty chemicals maker.

That string of developments led Dow to tighten its belt beginning in late 2008, with roughly 10 percent of the company’s direct jobs at major operations in Plaquemine and Hahnville being eliminated. Dow also said Thursday that its shift in emphasis from basic chemicals to more lucrative specialty chemicals will continue, a sign that future company moves could affect the Louisiana operations.

Dow employs nearly 3,000 in Plaquemine — 1,400 direct employees and 1,500 contract workers, with nearly 2,000 Hahnville workers split evenly between direct employees and contractors.

For now, the long-term pipeline deal secures production at the 28-unit Plaquemine operations, said Stacey Chiasson, Dow’s Louisiana public affairs leader.

“It made good business sense to us,” she said. “It’s a long-term commitment to that site, and it’s going to make the site competitive in the future in an environment where we’re concerned about climate change.”

Dow and Denbury didn’t discuss the dollar value of the deal, saying only that Dow would receive a “nominal fee” for the carbon dioxide it delivers to Denbury’s pipeline. To date, most of Denbury’s carbon dioxide used in oil production has come from natural sources in underground caverns.

The Dow agreement would lead to the first industrial supply contract.

Dow did say that diverting greenhouse gases from an ethylene oxide unit in Plaquemine would supply up to 190,000 tons a year to Denbury. That’s the equivalent of taking the emissions of 26,200 cars a year out of the atmosphere, Dow officials said.

Chiasson said the ethylene oxide unit would provide a sufficiently strong concentration of carbon dioxide to make the deal cost-efficient for Dow.