Dow Chemical reports record Q2 sales

Higher selling prices and volume helped offset a 30% rise in material prices incurred by U.S.-based chemical company Dow Chemical Corp. in the second quarter. The company raised prices 19% across the board, roughly US$2.4 billion, to offset the US$1.5 billion increase in raw material costs. However, even with the higher prices, sales volumes rose 9%, the company said. Sales were US$16 billion, the second highest quarter in the company’s history. Sales, excluding the impact of divestitures, rose 28% year-on-year, with double-digit gains in all operating segments and geographic areas. Sales were particularly strong in the lubricants and solvents divisions. Sales in the Asia-Pacific region reached a new quarterly record of US$2.7 billion. Second quarter net income was US$982 million, which is higher than analysts expected, compared with US$566 million last year. Dow Chemical is selling its polypropylene business to Braskem SA, Brazil’s largest chemical company for a reported US$340 million, excluding debt. “The polypropylene business is not a strategic fit for our company moving forward,” a spokesperson said. The polypropylene segment includes four plants in Germany and Texas. The sale is still up for approval by regulators. Dow also announced partnerships with Japan’s Mitsui & Co. Ltd. to make plastic from sugarcane, a venture that will compete with Braskem, and with Saudi Aramco to build one of the world’s largest chemical plants. (July 27, 2011)