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German: Dow Reviewing Thai Investments

https://www.chemnet.com   Aug 04,2010
SCHWALBACH, Germany -- Dow Chemical is considering investing up to US$150 million more to integrate downstream products into its petrochemical production in Thailand now that the US-based chemical giant sees some light at the end of the tunnel in getting its suspended project to proceed.


Gerard van Harten, vice-president for manufacturing and engineering in Europe, the Middle East, Africa and Russia, said Thailand had been short-listed as a potential location for downstream production of propylene oxide (PO).


"We still have confidence in Thailand. We believe this project is really a good one for Thailand, so it is of mutual interest," he said, adding that the Map Ta Phut impasse in Rayong province had nonetheless caused Dow to become more cautious about projects in the country.


Dow's PO joint venture with the Siam Cement Group (SCG) is among the 76 projects in Map Ta Phut that the Central Administrative Court ordered suspended last September. The project will be the largest of its kind in the world once completed, with annual capacity of 390,000 tonnes.


PO is among the largest-volume chemical intermediates produced in the world, with annual demand in excess of 6.5 million tonnes. It is widely used for industrial and commercial products such as polyurethane and propylene glycol, as well as in automobiles, furniture, paint, personal-care products and home insulation.


Holger Bar, Dow's global technology director, said the company would make a final decision by next year. If the project proceeds, it will be operational within three to five years.


"We have open options for this project, including co-investing with SCG," said Mr Bar.


The two have already co-invested in local production of polyethylene, including special grades of the synthetic resin. Together with its joint venture with Belgium-based Solvay, Dow has invested almost $2 billion in Thailand.


Speaking at a meeting with Industry Minister Chaiwuti Bannawat and representatives of the Board of Investment during their recent visit to Germany, Mr Bar said Dow hoped the PO project would win approval to proceed and be able to start production by next year's second quarter.


Mr van Harten said the challenges stemming from Map Ta Phut should prompt chemical companies to team up to comply with required standards, to strengthen and stabilise the industry.
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