Dow Chemical takes next step in business reorganization

New group created to house Dow businesses targeted for divestiture or other moves.

By Dave Hannon -- Purchasing, 2/26/2008 7:48:00 AM

Dow Chemical has created a new group within its company called the “Portfolio Optimization Group” which will include Dow businesses that have been “earmarked for strategic evaluation, with the goal of defining how best to maximize its long-term value to the company—whether that be through realignment to other Dow businesses, joint ventures or divestitures.”

            According to a statement from Dow Chemical, the businesses currently in the Portfolio Optimization Group include:

• SARAN Products and Specialty Films
• Polycarbonate
• Compounds and Blends
• Synthetic Rubber
• Specialty Copolymers

The Dow statement says, “Going forward, the Company expects to align other Dow businesses to the portfolio as they are assessed for strategic alignment with Dow’s transformational strategy.”

The latest move is part of Dow’s ongoing strategy to reduce its overall exposure to price and demand volatility in the chemicals and energy/petroleum markets. In January, Purchasing magazine included a detailed look at how Dow’s procurement organization is managing costs. (See: Dow Chemical turns inward).

In December, Dow Chemical announced it was selling a 50% stake in five of its businesses to Kuwaiti state-owned Petrochemical Industries Co. for $9.5 billion.

See also: Dow Chemical gets aggressive on costs and margins