K-Dow Petrochemicals
| Joint Venture | |
| Industry | Petrochemical Manufacturing |
| Headquarters |
Michigan, United States |
Key people | James R. Fitterling, CEO |
| Products | Polyethylene, Ethylenediamines, Ethanolamines, Polypropylene, and Polycarbonate |
K-Dow Petrochemicals was a planned $17.4 billion joint venture between The Dow Chemical Company and Petrochemical Industries Company (PIC) of the State of Kuwait, a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC).[1] A joint venture between the two companies was signed in July 2008.[2] However, critics to the deal from members of the Kuwaiti parliament,[3] leading to its collapse in December 2008.[4] Dow sued PIC, and was awarded over $2 bn damages by an non-governmental court in 2012.[5]
History
Formation
K-Dow Petrochemicals was to be a multinational corporation specializing in the manufacturing of plastics. It was an $11 billion joint venture between The Dow Chemical Company and Petrochemical Industries Company (PIC) of the State of Kuwait, a wholly owned subsidiary of Kuwait Petroleum Corporation (KPC).[6] On July 15, 2008 the two companies announced the location of their headquarters was to be in Southeast Michigan.[6] In the third quarter 2008 earnings conference call Dow Chemical officials stated the K-Dow Joint Venture is on track to close by the end of the year. On December 1, 2008 the two companies announced that they had signed a memorandum of understanding outlining agreed upon details about the Joint Venture. The transactions was expected to close on January 1, 2009. Operations were expected to begin on that same date.[1]
Breakup
Citing the global recession that begin in the later half of 2008, the Kuwaiti government scuttled the partnership prior to its launch on December 28, 2008.[7]
Dow currently has arbitration pending against KPC. The original MOU had a damages clause that allowed for damaged up to $2.5 Billion. Dow Chemical has stated the damages they are seeking may be in excess of that amount.
Subsidiaries
As a part of the Joint-Venture formation two of Dow Chemical's current joint-ventures with Kuwait Petroleum Corporation were to be transferred to K-Dow.
- Equipolymers
- MEGlobal
References
- 1 2 "Dow and PIC of Kuwait Sign Binding Joint Venture Agreement to Launch K-Dow Petrochemicals". PR Newswire. Retrieved 2008-12-01.
- ↑ Dow signs JV with PIC July 2008 Archived July 17, 2012, at the Wayback Machine.
- ↑ Dow issues defence of JV with PIC Archived July 17, 2012, at the Wayback Machine.
- ↑ Kuwait cancels $17 billion joint venture, Reuters Dec 28 2008
- ↑ International Chamber of Commerce International Court awards $2.16 bn to Dow in Kuwait arbitration
- 1 2 Christoff, Chris (July 15, 2008).New Dow Chemical venture to bring 800 jobs to southeastern Michigan.The Detroit Free Press. Retrieved on July 2, 2010.
- ↑ Diana Elias (December 28, 2008). "Kuwait scraps$17.4 billion venture with Dow Chemical". Detroit Free Press. Archived from the original on June 7, 2011. Retrieved December 28, 2008.