Amid a business environment still hampered by slow growth and volatility, US chemicals and plastics giant Dow Chemical (Midland, Michigan; www.dow.com) increased its EBITDA by 9% to USD 2.4 bn (4% to USD 2.3 bn on an adjusted basis) in Q1 2014. Sales settled just 1% higher at USD 14. 5 bn. That the group was able to achieve margin expansion in all key operating segments despite a USD 300m higher bill for feedstocks and energy “is solid proof point of the work we have done across the portfolio,” CEO Andrew Liveris said.

Over the course of 2014, Liveris said Dow’s “actions to generate margin improvement will gain further momentum,” with key investments expected to deliver increased earnings beginning in 2015. The US chemical market’s largest player will “continue to execute aggressive portfolio management,” among other things through the monetisation of non-strategic businesses, he added.

As announced in March, with activist shareholder Daniel Loeb of the hedge fund Third Point still trying to keep management in a stranglehold, the target for proceeds of divestment to be completed by the end of 2015 has been increased to USD 4.5-6 bn. This was the second time had Dow upped projections, earlier lifting the goalpost from USD 1.5-2 bn to USD 3-5 bn. In December 2013, Dow confirmed plans to carve out its chlorine and epoxy resins businesses and prepared them for a sale – see Plasteurope.com of 05.12.2013. In 2013, the group reported divesting assets worth USD 850m.

This year, Liveris said Dow is focused on delivering on its large investments, such as the Sadara Chemical joint venture with Saudi Aramco (Dhahran / Saudi Arabia; www.saudiaramco.com), set to go on stream at Jubail City II on the Saudi Gulf Coast – see Plasteurope.com of 25.11.2013 – and its US Gulf Coast projects, while at the same time “driving on productivity and cost and cash control targets to ensure we meet our earnings milestones.”

Figures for Dow’s operating segments in the 2014 first quarter showed that the Performance Plastics segment, encompassing polyolefins for packaging, speciality plastics and elastomers, again drove business and returned the highest margins – see Plasteurope.com of 31.01.2014. EBITDA improved by 5% to USD 1 bn, sales by 3% to USD 3.6 bn.

Within the segment, the business unit Dow Packaging and Specialty Plastics saw double-digit sales growth in Asia-Pacific and North America. In the Dow Elastomers unit, global demand increases in transportation and infrastructure applications were offset by cold weather effects in North America. The group said the outlook for this unit going forward is “positive,” with demand driven by transportation and hot melt adhesives for packaging.

In Dow’s Performance Materials segment, which includes polyurethanes, plastics additives and polymers for the automotive industry – as well as the epoxy business earmarked for divestment – Q1 EBITDA was flat at USD 440m. The earnings figure includes equity losses of USD 23m against USD 24m in Q4 2013. Sales were 1% higher at USD 3.3 bn.

The Polyurethanes unit within Performance Materials increased sales on the back of strong industrial and energy efficiency demand in all regions and a recovering Europe. Dow said productivity efforts, including six asset shutdowns, combined with increased emphasis on higher-value market sectors, position it for increased profitability here.

Another of the segment’s business units, Dow Automotive Systems, also improved sales, driven by the launch and ramp-up of innovative new adhesive products and strengthening transportation fundamentals in the United States, Europe and China. The US group said “pent-up demand is driving improvements in Europe.”