Dow Chemical to Build Specialty Plants on U.S. Gulf Coast

Dow Chemical said it plans to build several specialty material production plants on the U.S. Gulf Coast to take advantage of cheap shale-derived natural gas.

Margins in Dow's performance plastics business have been squeezed in Europe and Asia as the company uses more-expensive crude oil-derived naphtha to make some plastics in these regions.

In contrast, margins in North America have improved as the biggest U.S. chemical maker uses cheap natural gas in the region.

The plants will employ up to 3,000 workers at construction peak, the company said, without specifying how much it intends to invest.

The facilities will manufacture materials for several of Dow's fastest growing market segments, including packaging, hygiene and medical, electrical and telecommunications, transportation, sports and leisure and consumer durables, the company said.

"These moves directly support Dow's transformational strategy to create additional competitive advantage for Dow's performance businesses by expanding access to advantaged natural gas-based feedstocks," the company said in a statement.

Dow said it was exploring specific location options on the U.S. Gulf Coast, and that the final locations would be determined at a later date.

Dow also said on Monday that it had reached an initial agreement to provide ethylene supplies to a petrochemical plant on the U.S. Gulf Coast, being developed by Japanese oil refiner Idemitsu Kosan and trading house Mitsui & Co.