The largest U.S. chemicals manufacturer, The Dow Chemical Company (DOW) and manufacturer of sustainable, micronized rubber powders, Lehigh Technologies are in partnership to conduct collaboration targeted at making tires more sustainable.
Dow and Lehigh will combine proprietary technologies to modify the rubber particles. The program will combine Dow's expertise in polymer chemistry with Lehigh's expertise in sustainable rubber compound development and testing.
Lehigh’s startup’s proprietary manufacturing process takes tire and other post-industrial rubber material and up-cycles it into powders that are compatible with customers’ existing formulations. The idea is to integrate the sustainable powders into existing products, helping them become more sustainable (and thus meeting corporate targets) and reducing the overall cost.
More than 100 million tires on the road already contain Lehigh’s micronized rubber powder; the company is shooting for the 1 billion tire milestone.
On the other hand, Dow's 2015 Sustainability Goals include a focus on technologies that are advantaged by sustainable chemistry and this project is anchored in that same commitment.
Recently, Dow released its second quarter 2011 financial results. The company earned 85 cents per share in the second quarter of 2011, ahead of the Zacks Consensus Estimate of 80 cents per share as well as last year’s 54 cents per share. However, including one-time charges, the company earned 84 cents per share compared with 50 cents per share in the year-ago quarter.
Quarterly revenues jumped 17% year over year to $16.0 billion and were above the Zacks Consensus Estimate of $14.7 billion, driven by double-digit gains in all operating segments and geographic areas.
Excluding the impact of divestitures, volume grew 9% with gains in all operating segments but Coatings and Infrastructure, which was flat despite difficult conditions in construction end markets, and Chemicals and Energy. Volume increased in all geographic areas, led by Latin America (23%) and Asia Pacific (11%).
Excluding the impact of divestitures, price rose 19%, with double-digit increases in all geographic areas. All operating segments except Electronic and Specialty Materials (up 7%) and Health and Agricultural Sciences (up 5%) reported double-digit price gains. Price gains more than offset an increase of $1.5 billion in purchased feedstock and energy costs.
Sales in the emerging regions reached $4.9 billion, driven by Latin America, which increased more than 35% excluding the impact of divestitures. Volume in the emerging markets increased 14% excluding the impact of divestitures, with double-digit gains in Electronic and Specialty Materials, Health and Agricultural Sciences, and Plastics.
There was no financial guidance from Dow. However, Dow anticipates demand to improve further, especially in Asia with the global economic recovery. The US and European markets have also started showing signs of improvement. Dow is also optimistic on major consumer-markets, including electronics, coatings, automotive and packaging. However, construction markets are expected to remain weak.
Dow faces stiff competition from EI DuPont de Nemours & Co. (DD).
Currently, Dow has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long- term Neutral recommendation.
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