Chevron teams with Dow on large plastics venture

“A joint venture of San Ramon-based Chevron Corp. and ConocoPhillips is teaming up with Dow Chemical Co. to create the largest producer of styrene and polystyrene plastics in the Americas. Cost savings from the 50-50 venture between Chevron Phillips Chemical Co. and Dow Chemical will exceed 10 percent of sales. That’s because Dow is a net buyer of styrene in North America and Chevron Phillips is a seller, Andrew Liveris, Dow’s chief executive officer, said in an interview with Bloomberg. The joint venture would reduce costs in a low-margin industry. The venture hopes to bolster profit margins by matching larger styrene production from Chevron Phillips with a bigger polystyrene output from Dow. Styrene is made from benzene and is used to produce polystyrene, a hard plastic used in packaging and disposable cutlery. Chevron and its partner Phillips will contribute two U.S. factories to the joint venture. Dow will contribute seven plants, including five in the United States, to the new operation. The only California plant being contributed is a Dow factory in Torrance.”