Dow Chemical’s Union Carbide subsidiary is to sell its entire share of ownership in the Optimal Group of companies to Petronas for $660m (£400m).
Based in Kuala Lumpur, Optimal manufactures more than 70 products and serves key markets in the Asia-Pacific region from its petrochemical facility located in Kerteh in Terengganu, Malaysia. Products include ethylene and propylene feedstocks, ethylene oxide, ethylene glycol, butanol, various ethylene oxide derivatives, basic chemicals and speciality chemicals.
Dow and Petronas have agreed to enter into a commercial supply agreement, allowing the two companies to continue serving their current customer bases with products manufactured by Optimal.
The announcement of Dow’s divestiture of Optimal follows other actions designed to boost Dow’s finances and improve its cash flow.
Recent actions have included the $1.7bn sale of Morton Salt, the sale of the company’s calcium chloride business to Occidental Petroleum and the sale of its interests in Total Raffinaderij Nederland (TRN) for around $725m.
The Petronas transaction, which is subject to customary conditions and approvals, is expected to close by the end of the third quarter of 2009.
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