Dow Chemical Co. (NYSE: DOW), the second-largest chemical company by revenue, said Thursday it will build an ethylene plant in Texas to take advantage of the sharply lower costs of natural gas feedstock, something its foreign rivals cannot take advantage of.
Midland, Mich.-based Dow will open the plant in 2017 as part of its $4 billion expansion to increase ethylene and propylene production in the U.S. Gulf Coast region. The ethylene plant, to be built in Freeport, Tex., will create up to 2,000 jobs, the company said. Dow also has a propylene plant planned with a start date of 2015.
“For the first time in over a decade, U.S. natural gas prices are affordable and relatively stable, attracting new industry investments and growth and putting us on the threshold of an American manufacturing resurgence,” said Andrew Liveris, Dow chairman and CEO.
The Freeport location is already Dow's largest manufacturing site, producing 44 percent of Dow's U.S. products and 20 percent of its global products. It has 4,200 employees and 3,000 contractors.
Dow's rivals, including Chevron Phillips Chemical Co. and Royal Dutch Shell PLC also plan to build ethylene plants in the U.S. during the next four years.
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Shares of Dow were up 22 cents to $34.83 in Thursday morning trading.