K-Dow Petrochemicals

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K-Dow Petrochemicals
Joint Venture
Industry Petrochemical Manufacturing
Headquarters Michigan,
United States
Key people
James R. Fitterling, CEO
Products Polyethylene, Ethylenediamines, Ethanolamines, Polypropylene, and Polycarbonate

K-Dow Petrochemicals was a planned $17.4 billion joint venture between The Dow Chemical Company and Petrochemical Industries Company (PIC) of the State of Kuwait, a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC).[1] A joint venture between the two companies was signed in July 2008.[2] However, critics to the deal from members of the Kuwaiti parliament.[2] leading to its collapse in December 2008.[3] Dow sued PIC, and was awarded over $2 bn damages by an non-governmental court in 2012.[4]

History[edit]

Formation[edit]

K-Dow Petrochemicals was to be a multinational corporation specializing in the manufacturing of plastics. It was an $11 billion joint venture between The Dow Chemical Company and Petrochemical Industries Company (PIC) of the State of Kuwait, a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC).[5] On July 15, 2008 the two companies announced the location of their headquarters was to be in Southeast Michigan.[5] In the third quarter 2008 earnings conference call Dow Chemical officials stated the K-Dow Joint Venture is on track to close by the end of the year. On December 1, 2008 the two companies announced that they had signed a memorandum of understanding outlining agreed upon details about the Joint Venture. The transactions was expected to close on January 1, 2009. Operations were expected to begin on that same date.[1]

Breakup[edit]

Citing the global recession that begin in the later half of 2008, the Kuwaiti government scuttled the partnership prior to its launch on December 28, 2008.[6]

Dow currently has arbitration pending against KPC. The original MOU had a damages clause that allowed for damaged up to $2.5 Billion. Dow Chemical has stated the damages they are seeking may be in excess of that amount.

Subsidiaries[edit]

As a part of the Joint-Venture formation two of Dow Chemical's current joint-ventures with Kuwait Petroleum Corporation were to be transferred to K-Dow.

  • Equipolymers
  • MEGlobal

References[edit]

External links[edit]