Dow, Mitsui form JV to Produce Chlor-Alkali

Dow Chemical said it would form a joint venture with Japan's Mitsui to construct and operate a new chlor-alkali facility at its Freeport, Texas, complex. The new facility, slated to have a capacity of about 800 kilotons per year, is expected to begin operations in mid-2013 and will be operated by Dow, the company said.

In a filing with the U.S. Securities and Exchange Commission, Mitsui said it would invest $140 million in the venture in which the two companies will have an equal stake. Dow has already completed the front-end engineering and design, and expects only a minimal capital outlay to start up the project.

Dow had shut down an older chlor-alkali facility at Freeport at the beginning of 2009 as the economy slumped and demand for basic chemicals declined. Under the project, Mitsui will sell chlorine mainly in Asia, including Japan, while Dow will be selling caustic soda in the United States, a Mitsui spokesperson said.

Chlorine and caustic soda, products of the chlor-alkali sector, are basic materials in the chemical processing industry and used in the manufacturing of paper, textile, pharmaceutical and polyvinyl chloride. The venture will create about 50 long-term jobs at the location and about 500 construction jobs during construction, Dow said.

Construction of the plant is expected to begin in the fourth quarter and will replace the company's previously announced "Chlorine 7" project.