I cannot think of anything to date that the Andrew Liveras lead Dow Chemical (DOW) has alluded to that has not happened. No reason to start doubting now.
“We expect our business in India to touch $1 billion by 2010 from the present $300 million. Dow looks at the proposed chemical hubs as an opportunity to scale up its manufacturing capabilities in the country,” Peter G Halloran, director-supply chain, Mumbai service center, Dow Chemical International, said last week. DOW also expects to see 50% of its R&D initiatives coming from India in the next 3-4 years, according to Halloran.
Dow Chemical (DOW), is betting big on the proposed Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) in the country to scale up its manufacturing capabilities in line with upcoming business opportunities much like they are doing in China, Russia, Iraq and Saudi Arabia.
Halloran said DOW was in talks with various government agencies to set up manufacturing facilities here.
India's Commerce Minister Kamal Nath recently said that since DOW did not have a direct link to the Bhopal gas tragedy (it bought Union Carbide several years after the tragedy), its investments in India would not be adversely affected.
DOW is making huge bets overseas where inputs will be cheap for both raw materials and skilled labor. If you go back and review most of their releases, these project are scheduled to all come online around 2010. What about between now and then? DOW is becoming a cash producing machine and these new projects are being paid for with produced funds, not cash pout of pocket and that point cannot be emphasized enough. It means DOW can keep these projects coming, adding to earnings without any balance sheet weakening, risk to it's near 4% (and growing) dividend or reduction in it's stock repurchase plans. All these are very good things for investors.
The next big event, (aside from any additional almost weekly expansion plans) will be the upcoming "white paper" this fall. In it they will detail the expected results from Liveras's strategy. I think shares are treading water currently because Wall St. is having trouble determining the value of all the recent joint ventures DOW has entered into. Without a clear understanding of their impact to earnings, people are not able to value DOW.
Personally I think the value of these in a year will be multiples of what they now the paper, when release will illustrate this. What it will also show is DOW is becoming less dependent on the US market and even more of a worldwide player is areas other that cyclical chemicals that their fortunes have been predominately tied to until as recently as last year.