(DOW) The Dow Chemical Company Invests $10B in China

Chemical giant The Dow Chemical Company (DOW) plans to invest $10 billion in China. The $10 billion fund will cover a coal chemical project in the northern Chinese province of Shaanxi, where the chemical giant will join forces with Shenhua Group Corp. and the local government.

During first-quarter 2011, Dow had $1.04 billion of sales in China. However, management expects the annual sales growth in the country to slow to 15% from an average of 20% since 2000.

On the other hand, Dow Water & Process Solutions, a business unit of The Dow Chemical Company, opened the Global Water Technology Development Center in Tarragona, Spain. The state-of-the-art center is designed to accelerate the commercialization of Dow’s technologies that make possible the production of clean water.

The Global Water Technology Development Center was funded through a $15 million Dow investment, along with grant subsidies from Spain’s Ministry of Science and Innovation for research programs in this area, which is in line with the Spanish government’s commitment to research and development in the field of sustainable water supplies.

Moreover, Dow faced allegations from Hagens Berman after the company made substantive changes to its employee pension plan, which is anticipated to violate federal law.

Hagens Berman is investigating whether Dow fully disclosed the possible disadvantages of the new plan to its employees.

Recently, Dow reported its first quarter of 2011 results. The company earned $0.82 per share in the first quarter of 2011, ahead of the Zacks Consensus Estimate of $0.67 per share as well as last year’s $0.43 per share. However, including one-time charges, the company earned $0.54 per share compared with $0.41 per share in the year-ago quarter.

Quarterly revenues jumped 20% year over year to $14.7 billion and were above the Zacks Consensus Estimate of $13.8 billion. Volume and pricing gains across all business segments and geographical regions, particularly North America and Europe, yielded healthy revenue growth.

Dow anticipates that demand would improve further, especially in Asia with the global economic recovery. The US and European markets have also started showing signs of improvement.

Dow is also optimistic on major consumer-markets, including electronics, coatings, automotive and packaging. However, construction markets are expected to remain weak.

DOW faces stiff competition from EI DuPont de Nemours & Co. (DD).

Currently, Dow has a short-term (1 to 3 months) Zacks #1 Rank (Strong Buy) but a long- term Neutral recommendation.

DU PONT (EI) DE (DD): Free Stock Analysis Report

DOW CHEMICAL (DOW): Free Stock Analysis Report

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.

Comments

Powered by Facebook Comments


Similar Posts: | | | | Basic Materials | Chemicals - Major Diversified

RSS feeds: DD | DOW | EI DuPont de Nemours & Company | The Dow Chemical Company | Basic Materials | Chemicals - Major Diversified |

Other Posts by | RSS Feed for this author