As I read the news it’s always good to be on the lookout for where money will next be spent. It was therefore with interest that I recently read some comments from the President of Dow Benelux, Mr Anton van Beek. The article appeared in the Dutch financial magazine, Financiele Dagblad and, so far, hasn’t been reported very much elsewhere.
Why was it significant? Mr van Beek hinted at a substantial investment to their Terneuzen facility.
For those who aren’t aware, Dow Terneuzen is located in The Netherlands. It is the second largest production site of The Dow Chemical Company in the world and the largest site of Dow Benelux. The naphtha crackers are at the heart of the establishment where raw naphtha and LPG are converted into ethylene, propylene, butadiene and benzene.
Mr van Beek pointed out that DOW had invested billions of dollars in the US and Middle East in recent years, and said a lot of those major works had been completed. “Those investments are now done” he said, “that house has been built, and next year new resources will become available to build a new house. It’s as simple as that”.
This seemed to be a fairly strong indication that an investment decision either has been made, or is perhaps likely to be made. Whilst Mr van Beek could not confirm either way, he indicated lobbying work was in progress and that the Terneuzen location was “extremely well positioned”. The exact details of what might be invested in he could not say due to competitive confidentiality, however the article speculated it could be an expansion of the facility.
Over the years some in the industry had thought the Terneuzen facility would not expand, but this revelation might now seem to suggest otherwise. What we do know is that DuPont and DOW are currently in the process of a merger. DuPont have their Chemours facility in Dordrecht, which is just over 100km away. Could this be significant? I do not know.
In any case, once EU antitrust regulators have approved the merger it could be done as early as next year, forming a company with over $130 billion of market value and more than one-hundred thousand staff. This follows a number of other deals in agri-petrochemical sector: ChemChina has takeover plans for Syngenta; and Bayer also plans to acquire their US rival, Monsanto.
I wonder: what are the opportunities for valve suppliers if this expansion were to go ahead? Could this be some potential good news for flow control suppliers?
As always, keen to hear your thoughts.
Photo Source: Twitter - @DowChemical