Dow Chemical to prune portfolio, profit beats estimates
By Swetha Gopinath and Garima Goel
(Reuters) - Dow Chemical Co (DOW.N: Quote) reported a better-than-expected quarterly profit due to strong margins at its plastics business and higher pesticide sales, and said it was looking to further prune its business.
Dow Chemical has divested non-core businesses representing about $8 billion in revenue since 2009 and is seeking buyers for its polypropylene licensing and catalyst business and its plastics additives unit.
"One-third of our business is in low-cost commodity, cyclical-type business, where my competition is state-owned enterprises," Chief Executive Andrew Liveris said in an interview to CNBC on Thursday.
"My competition is racing to commoditize my products. That means I have to keep working them out of the portfolio and keep moving to areas of high-margin, high-technology..."
Dow Chemical is part of an industry-wide shift among chemical makers away from low-margin commodity businesses into more lucrative products such as pesticides and seeds.
Bigger rival DuPont said on Tuesday it planned to exit its titanium paint pigments business to focus on its growing agricultural unit, where higher sales helped its second-quarter profit beat analysts' estimates.
A Dow Chemical spokeswoman, Rebecca Bentley, did not name the non-core assets the company was looking to divest.
Some analysts pointed out that Dow Chemical's commodity business still accounted for a large portion of its profit and offered a cautionary note on the divestments. Continued...