Dow Corning and Wacker-Chemie announce plan to form a joint venture in Asia
Dow Corning Corp. and Wacker-Chemie GmbH plan to form a joint venture in Asia to make silicone intermediates and fumed silica used in products for industrial and consumer applications.
Under the plan, each company would independently operate its own manufacturing plant for finished products at the same site, and each would continue to compete independently inside and outside of Asia.
The companies said in a press release Wednesday that an integrated site in the area will provide cost and quality advantages that will help develop local markets. The products developed will be used for applications ranging from construction and lubricants to electronics and personal care.
Dow Corning said Asia is critical to the growth of silicon-based materials, while Munich-based chemical company Wacker said it expects double-digit growth rates in the region "over the next several years."
Completion of the alliance is subject to definitive agreements as well as necessary regulatory and governmental approvals.
Dow Corning, which is equally owned by Dow Chemical Co. and Corning Inc., generates more than half of its annual sales outside the U.S. It reported 2002 sales of $2.6 billion.
Wacker-Chemie posted 2002 sales of about EUR2.7 billion, with 80% generated outside Germany.
Dow Chemical said recently that it can achieve 10% annual growth in earnings over the next business cycle based on portfolio improvements, productivity gains, volume growth and cost savings. The company would need to earn more than $6 a share by the next peak in the cycle in order to meet its 10% annual growth target. It reported a loss of 37 cents a share for 2002.
Corning Inc. recently reaffirmed that it expects a loss of 2 cents a share to income of 1 cent a share for the second quarter.
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