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K-Dow Petrochemicals

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K-Dow Petrochemicals

K-Dow Petrochemicals
Type 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 to be a $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, hostility to the deal from members of the Kuwaiti parliament led to the deal coming under attack,[3] leading to its collapse in December 2008.[4] Dow subsequently sued PIC, and was awarded over $2 bn damages by an international court in 2012.[5]

History

Formation

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).[6] On July 15, 2008 the two companies announced the location of their headquarters was to be in Southeast Michigan.[6] 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

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.[7]

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

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

  1. ^ a b Launch K-Dow Petrochemicals""Dow and PIC of Kuwait Sign Binding Joint Venture Agreement to . PR Newswire. Retrieved 2008-12-01. 
  2. ^ Dow signs JV with PIC July 2008
  3. ^ Dow issues defence of JV with PIC
  4. ^ Kuwait cancels $17 billion joint venture, Reuters Dec 28 2008
  5. ^ International Chamber of Commerce International Court awards $2.16 bn to Dow in Kuwait arbitration
  6. ^ a b Christoff, Chris (July 15, 2008).New Dow Chemical venture to bring 800 jobs to southeastern Michigan.The Detroit Free Press. Retrieved on July 2, 2010.
  7. ^ Diana Elias (December 28, 2008). "Kuwait scraps$17.4 billion venture with Dow Chemical". Detroit Free Press. Retrieved December 28, 2008. 

External links

  • "Dow and PIC of Kuwait Continue Progress on Proposed $11B Joint Venture"
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