Dow Chemicals is the largest, by market position, ethylene and polyethylene maker in the world having 7% of world(prenominal) polyethylene capacity by year end 1995. Why then would a party in this position be interested in acquire Petroquimica Bahia Blanca (PBB), a roughly 20 year old petrochemical industrial plant that fires ethylene and polyethylene, which is being privatized by the Argentine government? obviously put, the PBB plant provides Dow Chemicals the opportunity to expand on their leading global market position and become the dominant polyethylene producer in Latin America.
First some background on the product under consideration. Polyethylene plastic is used in many forms, from milk jugs to grocery store bags, and is produced from ethylene. Ethylene is produced from internal gas molecules called ethane or from crude oil molecules called naphtha. These molecules argon sent to processing plants, crackers, which converts the molecules to ethylene, the ethylene is then sent to plants which produce different forms of polyethylene. The PBB plant contains a cracker and a mellow density polyethylene plant.
The PBB plant acquisition would be the jump step in the overall Argentina polyethylene condescension strategy and should be considered by Dow Chemicals for numerous reasons including corporate strategy, point location, growth potential, and current government policies in Argentina. To be triple-crown in the polyethylene industry in Argentina, along with acquiring the PBB plant, Dow would need to take devil additional actions first, acquire two polyethylene plants from Polisur and then build a new ethylene cracker accompanied with a polyethylene plant. The acquisition of the Polisur polyethylene plants makes sense as they are sourced ethylene from the PBB plant, while crook of the new ethylene cracker and polyethylene plant would retard production can meet the forecasted demand growth.
Justification
Dow Chemicals should invest in the PBB facility,...If you want to get a full essay, order it on our website: Orderessay
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