Dow Chemical mulls a name change in strategy shift

The company is moving away from the basic chemicals business that built its reputation. If it succeeds, it wants to simply be called 'Dow.'

By InvestorPlace Dec 3, 2013 1:46PM

Credit: © Bob Bird/AP

Caption: The Dow Chemical Co. Union Carbide plant on Blaine Island in South Charleston, W.Va. By Christopher Freeburn


Dow Chemical (DOW), which has been around since 1897, is one of American industry’s best-known brands. However, if the company meets strategic targets in a new restructuring plan, it could trim its iconic name to just "Dow."


On Monday, CEO Andrew Liveris said the company might shorten its name if it succeeds in shedding its basic chemicals business, though it has no set plans to do so just yet.


Liveris also remarked that, after its restructuring, Dow hopes to be associated with “chemistry rather than chemicals,” The Wall Street Journal notes.


The company is looking to sell or separate nearly $5 billion of its basic chemical businesses, which represents almost 10% of its current operations. Dow says it will shed operations that produce chlorine and other commodity chemicals in seven countries. Those businesses are facing stiff competition from Asian rivals and generate lower margins compared to Dow’s other units.

For instance, Dow is looking to shed its Chlorinated Organics facilities in Texas and Germany. Also out is epoxy -- which NASA used to build the heat shields for Apollo program spacecraft -- which includes facilities in the U.S., Italy, South Korea, China and Brazil.


Exiting the basic chemicals business will allow Dow to concentrate on higher-margin businesses built around patented products, including specialty chemicals and agricultural products.


Dow said it expects to make transactions related to these businesses within the next one to two years.


Dow stock was off marginally Tuesday morning.


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