Dow and Binhua Sign Memorandum of Understanding for New Joint Venture in China
Facility to Supply Material for Non-Ozone Depleting Refrigerants to Meet Growing Demand in Asia
MIDLAND, Mich.--(BUSINESS WIRE)--The Dow Chemical Company (NYSE: DOW) and Befar Group Co., Ltd. (Binhua, 601678 SH), today announced a memorandum of understanding (MOU) for a new 50-50 joint venture to produce perchloroethylene (PCE), a key building block material for non-ozone depleting refrigerants used in industrial, automotive, consumer, commercial, building and construction, and other applications.
Under the MOU announced today, the two companies will explore development of a new, world-scale, PCE manufacturing facility in Binzhou, Shandong Province, China. The new facility would have an initial target capacity of 40 kilotons per year, with the ability to double production to 80 kilotons soon thereafter. Assuming the terms and milestones of the MOU are met and subject to customary government approvals, Dow and Binhua estimate production would begin in 2014.
According to Dow President of Chemicals & Energy, Carol Williams, the proposed joint venture with Binhua is another critical milestone toward fulfillment of the Company’s business strategy.
“We are pleased at the prospects of a new partnership with Binhua that aligns so well to both companies’ strategies and allows Dow to grow our manufacturing presence in China,” Williams said. “At the same time, the prospective partnership would increase our ability to meet the world’s rapidly expanding need for more sustainable product offerings, while continuing to provide a strong foundation for continued growth in our performance and market-driven businesses.”
Peter Sykes, President of Dow Greater China, underscored the importance of the relationship with Binhua to Dow’s regional capabilities in China to meet customer demand in this growing marketplace.
“Our collaboration with Binhua is a fine example of two great companies partnering to serve the needs of customers for high quality, reliable solutions,” said Sykes. “We look forward to jointly supporting the rapid China market growth in a sustainable and environmentally responsible manner.”
Mr. Zhang Zhongzheng, the Chairman of Binhua reinforced the strategic importance of the proposed joint venture to the strategy of Binhua. He was convinced that both parties will work together toward a win-win situation, deepen the communication and cooperation, and build friendship through mutual trust for greater development. He also pointed out, “We cherish the precious opportunity to work with Dow and will work hard to keep our promises under this agreement. We will try our utmost to facilitate the execution and implementation of subsequent projects with Dow, and to boost our cooperation in a broader range of areas at higher levels in order to achieve substantial results. We sincerely hope that we can develop and grow together with Dow towards a mutually beneficial future.”
Global demand for PCE as a feedstock is increasing for non-ozone-depleting fluorocarbon refrigerants in industrial, automotive and home applications. In China, the market for PCE is growing rapidly, but to date, local supply has been limited. The proposed Dow-Binhua joint venture is designed to meet this significant market opportunity.
About Befar Group Co., Ltd.
Established in 1970, and in the past four decades, bearing for concept of “Comprehensive, coordinated and sustainable development”, pursuing for harmony among human, society and nature, Befar made great strides in developing “green chemical” and “cyclic economy”. Now, Befar’s business scope covers salt-chemical, petrochemical, fine chemicals, port warehouse, culture, media and finance, and products are popular in more than 31 domestic provinces and 20 abroad countries. In 2010, Befar made a turnover of $3.9 billion, net profit $0.4 billion. In Feb 2010, company got public listed in Shanghai Stock Exchange. So far, Befar is an important supplier of propylene oxide, trichloroethylene and additives for crude exploiting, also one important manufacturer of caustic soda in China.
About The Dow Chemical Company
Dow (NYSE: DOW) combines the power of science and technology with the “Human Element” to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world’s most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow’s diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company’s more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to “Dow” or the “Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.