Huntley said that while initially there will be no impact on the capacity of Dows businesses included in the joint venture, joining with PIC will potentially provide a chance for a greater focus on them, including the ethanolamines business.

Part of the reason of creating this joint venture is because we see there is huge opportunity for the joint venture, as a far-more-focused business, to be able to start to define where and how those businesses best grow, he told Lube Report. Right now, ethanolamines is one of many, many businesses that Dow has. When it goes to the joint venture, it will be one of maybe the top half-dozen businesses [in the joint venture]. There will be a much clearer agenda focused on those businesses, both in terms of investments and for capacity additions, where that is seen as wise and prudent. The joint venture ownership will allow those decisions to be made in a way that really benefits the businesses that are going into the joint venture.

U.S. Expansion Delayed
On Friday, Dow also announced it would delay until the second half of 2008 a 100-million pound (45,000 mt/y) ethanolamines nameplate capacity expansion – announced in October 2006 for completion in 2007 – planned at the St. Charles Operations site, owned by Dow subsidiary Union Carbide Corp. in Hahnville, La. The company said the delay is due to tight labor supply throughout the Gulf Coast.

When completed, the expansion will increase Dows total ethanolamines capacity on the U.S. Gulf Coast to nearly 800 million pounds. Its other U.S. ethanolamine plant is the Seadrift Operations site in Port Lavaca, Texas. Dow also participates in the Asia-Pacific market via a 165 million poundethanolamines unit at Optimal Chemicals (Malaysia) Sdn. Bhd, a joint venture of Union Carbide and Petroliam Nasional Berhad (Petronas).

The Kuwaiti-Dow Deal
According to Dows webcast presentation Dec. 13, the company believes the Kuwaiti joint venture creates a new global player with enhanced capabilities to grow, especially in China, India and the Middle East.

Huntley saidDow has worked in three successful joint ventures with PIC over the last 10 years. So we know whats in store with them, and likewise they know whats in store working with us, Huntley said. There wont be too many surprises.

Because the joint venture covers a half-dozen countries around the world, there could be ramifications for some employees. In some countries, employment law will not allow us to transfer employees into the joint venture, he said. It really will depend on what is allowed in the different locations. On top of that, its a matter of some of these plants being on sites where there are a number of other businesses that are not going into the joint venture. Its really about getting the right people into the right positions.

He said in some cases Dow may consider contracting its own employees in the joint venture. That has yet to be finalized, he said. We anticipate concluding the deal towards the end of next year, and these are the sorts of things we need to sort out between now and then.

Dow said customers will benefit from a stronger supplier having feedstock integration, global supply chain, advanced technologies, resources to grow with customer demand, and an ongoing commitment to the future of the petrochemical industry.

Maha Mulla Hussain, managing director of PIC of Kuwait, said the joint venture will enable PIC and Dow to benefit from access to feedstock offtakes from future KPC refineries in emerging regions. This will give the new JV company the distinct advantage of full integration from feedstocks to derivatives, while meeting growing customer demand in emerging markets, Hussain said.