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Dow Chemical Builds New R&D Facility in Texas

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In a bid to bolster its research and development (R&D) capabilities in Texas, chemical giant Dow Chemical (DOW) is setting up a new R&D facility in Lake Jackson. The new unit will be near to the Michigan-based company’s biggest manufacturing site in Freeport, Tex.

The new facility – Texas Innovation Center – will support marketing of solutions across a spate of high-growth end-use markets including food packaging, personal care and automotive. The facility, which will be developed by Core Real Estate, LLC, will house state-of-the-art laboratory facilities and technical expertise centers.

With enhanced capabilities at the new facility, Dow will continue its tradition of R&D expertise in Texas through the delivery of innovative technologies. The Texas Innovation Center will replace many of the company’s R&D units in Freeport.

Following its completion (expected in 2016), the center will offer Dow’s researchers and scientists with best-in-class tools and the collaborative space and serve as a global R&D hub of modern lab and office facilities for over 2,000 people. The facility is expected to boost the company’s R&D operations on a long-term basis.

Dow’s Texas operations site, which is home to one of its biggest R&D centers, employs over 12,000 people and has more than 65 manufacturing plants. These plants produce 44% of the company’s products sold in the U.S. and roughly 21% of the products sold worldwide.

Dow is benefiting from strong fundamentals in the agriculture and food markets, and is leveraging its North American feedstock advantage. A string of innovative products in its pipeline adds to its strength.

Moreover, Dow remains committed to its cost reduction and efficiency programs while reducing debt, improving cash flows and maximizing shareholder returns. The company also continues to invest in attractive regions through highly-accretive projects including the expansions in the U.S. Gulf Coast and Sadara joint venture in the Middle East. Dow expects its strategic actions to drive earnings and enhance shareholder value in 2014.

Dow is a Zacks Rank #2 (Buy) stock.

Other companies in the chemical space worth considering are Northern Technologies International Corp. (NTIC), Methanex Corp. (MEOH) and PPG Industries Inc. (PPG). While Northern Technologies carry a Zacks Rank #1 (Strong Buy), both Methanex and PPG Industries hold a Zacks Rank #2 (Buy).

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Read the Full Research Report on NTIC
Read the Full Research Report on PPG
Read the Full Research Report on MEOH

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