DowDupont to Start Up New Facilities in Freeport, Texas
DowDupont’s expansion in Texas
On September 21, 2017, DowDupont (DWDP) announced that it’s starting up two new facilities in Freeport, Texas, to manufacture ethylene and ELITE, its new enhanced polyethylene. Both facilities are expected to be fully operational by 4Q17. The ethylene manufacturing facility will have a capacity to produce 1.5 million metric tons and later expand to 2.0 million metric tons, making it the world’s largest ethylene manufacturing plant.
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The ELITE polyethylene facility is expected to have a production capacity of 400,000 metric tons. Once fully operational, both facilities will drive DWDP’s revenues and cash flows. Andrew Liveris, executive chair of DowDupont and chief executive officer of Dow, said, “This is a monumental moment for Dow as we advance our global growth strategy by fully deploying our unmatched molecular and physical integration….These facilities are an integral part of Dow’s investments on the U.S. Gulf Coast to meet increasing consumer-led demand in our core market verticals of packaging, infrastructure and consumer care, and will enable our next level of earnings and cash flow growth.”
DWDP stock performance
After the successful merger completion of Dow Chemical and DuPont, the newly merged company, DowDupont (DWDP), began trading on September 1, 2017. DWDP rose marginally by 0.10% for the week ended September 22, 2017, and closed at $69.96. DWDP underperformed the Materials Select Sector SPDR ETF (XLB), which rose 0.90% for the same period. XLB has invested 26.4% of its portfolio in DWDP. Analysts expect DWDP’s 12-month price target to be $77.90, implying a return potential of 11.3% from the closing price of September 22, 2017. DWDP’s 14-day relative strength index of 72 indicates that the stock has temporarily moved into an overbought situation and could see some selling.