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Dow Chemical Unleashes New Investment Plans


Oct. 31 2019, Updated 12:59 p.m. ET

Dow Chemical’s new investment plans

On September 12, Dow Chemical, part of DowDuPont (DWDP), announced debottlenecking and capacity expansion plans in its silicones business. The company intends to meet the growing demand in end markets like electrical, consumer goods, performance building, and home and personal care. However, Dow Chemical didn’t specify the financial aspects of the investment.

The projects are spread over three years. Below are brief details about Dow Chemical’s invest plans:

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  • Dow Chemical will construct a hydroxyl functional siloxane polymer plant in Carrollton, Kentucky. The plant is expected to increase Dow Chemical’s polymer capacity in the Americas by 65%.
  • Dow Chemical will install a new specialty resin plant in Zhangjiagang, Jiangsu, China, which will help provide resin intermediates to the high-value silicone products.

DowDuPont’s stock price

DowDuPont’s stock prices declined 2% and closed at $68.58 for the week ending September 14. Despite the decline in the stock price, DowDuPont managed to trade 2.0% above the 100-day moving average price of $67.23, which indicates an upward trend in the stock. However, on a year-to-date basis, the stock has fallen ~3.7%. DowDuPont’s 14-day relative strength index of 46 indicates that the stock isn’t overbought or oversold.

Investors can hold DowDuPont indirectly by investing in the Materials Select Sector SPDR Fund (XLB). XLB has invested 24.8% of its portfolio in DowDuPont. XLB also provides exposure to Praxair (PX), Air Products and Chemicals (APD), and LyondellBasell (LYB) with weights of 8.2%, 6.7%, and 6.1%, respectively, as of September 14.


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