Dow at its 2021 Investor Day announced plans to deliver additional underlying EBITDA growth of more than $3 billion while keeping capital expenditures at or below depreciation and amortization levels across the cycle.
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The investments will also advance Dow's circular and low carbon offerings across its portfolio, driving the company toward zero carbon emissions across its global asset base.
Near term capital and operating growth investments are expected to generate approximately $2 billion of additional EBITDA, and a new net zero carbon emissions ethylene and derivatives complex is expected to deliver approximately $1 billion of EBITDA per year by 2030.
In flight actions will also contribute to Dow's earnings and cash flow growth potential, including Dow's previously committed advancements in digitalization capabilities across the enterprise, which are expected to deliver $300 million of EBITDA by year end 2025, and the Company's stated restructuring target of $300 million of run rate EBITDA, which it is on track to deliver by the end of 2021.
The projects will enable the Company to meet continued demand growth for higher margin, higher growth products while leveraging Dow's global scale to penetrate deeper into attractive end market verticals expected to continue to grow well above GDP, including packaging, infrastructure, consumer and mobility.
Capital and operating growth investments include:
Packaging and Specialty Plastics: incremental capacity expansions in polyethylene and functional polymers; further enhancements of feedstock flexibility; and implementation of next generation low carbon, lower cost technologies, while accelerating its shift to higher margin products and unlocking additional value through productivity improvements.
Industrial Intermediates and Infrastructure: additional capacity for high margin polyurethane systems, downstream alkoxylates, specialty amines and isocyanates to deliver solutions for next generation infrastructure, capturing demand growth in pharmaceuticals, cleaning, sustainable textiles and applications requiring carbon reduction, while continuing to shift its product mix toward higher margin applications.
Performance Materials and Coatings: capacity expansions in silicone polymers, adhesives and sealants as well as coatings binders and acrylates to accelerate growth of downstream business, leveraging global scale and broad innovation portfolio to deliver differentiated solutions and sustainable materials in key end markets including infrastructure, electronics, mobility, home and personal care and coatings.
Dow also announced today plans to construct the world's first net zero carbon emissions ethylene facility and convert the assets at its Fort Saskatchewan site in Alberta, Canada, to create the first net zero carbon emissions complex with respect to scope 1 and 2 carbon dioxide emissions.
These investments will decarbonize approximately 20 percent of Dow's global ethylene capacity while growing its polyethylene supply by about 15 percent.
These investments support Dow's commitment to reduce its net annual carbon emissions by an additional 15 percent, reducing net annual carbon emissions by approximately 30 percent by 2030 (since 2005).
On its path to zero carbon emissions, the Company is ready today to scale near term technology related investments including circular hydrogen and carbon capture and storage and is also exploring investment in modular nuclear. Longer term investments include electric cracking, ethane dehydrogenation and advanced batteries.
Dow also announced broader carbon reduction actions today, including additional renewable energy agreements in the Americas and Europe. Earlier this year the Company announced a multi generational plan at its site in Terneuzen, the Netherlands, to invest in clean hydrogen, carbon capture, and e cracking capabilities.
The Company expects to allocate approximately $1 billion of capex annually to decarbonize its global asset base in a phased, site by site approach. ■