The largest U.S. chemical maker - Dow has
spent much of 2012 grappling with weak demand, but still company posted a
better than expected quarterly profit, helped in by cost cuts. The company
decided to slash spending on capital projects, saying the cuts will not deter
the chemical maker from meeting aggressive earnings targets.
Andrew Liveris, Chief Executive of Dow Chemical
said they will reduce the
capital expenditure budget by $100 million in 2012 and $700 million in 2013. Reducing
spending on growth projects saves cash in the short term but can limit options
in the future if certain projects haven't been properly funded. Company must stop
future growth projects that are no longer affordable in this environment. The
company will focus on growth projects with positive returns in the far-distant
future.
Dow announced another expansion project,
saying it would build a world-scale synthetic rubber plant somewhere on the
U.S. Gulf Coast and hopefully have it online by 2016.
Read
lot more in Rubber4U – 1st November 2012 issue
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