Dow Europe Holding BV, a subsidiary of The Dow Chemical Company (NYSE:DOW), has entered into an agreement with Turkish company Aksa Akrilik Kimya Sanayii A.S. to form a joint venture called DowAksa Advanced Composites Holdings BV or simply DowAksa. The JV will manufacture carbon fiber and derivatives. Both Dow and Aksa hold a 50% stake in the JV. DowAksa will develop a range of products to cater to the growing carbon fiber composites market. Through the JV, the companies will expand carbon fiber production assets in Turkey. 
Overall, we expect the broader segment performance plastics & materials to gain market share in the coming time helped by feedtock dynamics and increased manufacturing. Favorable feedstock dynamics from shale gas in North America are expected to help U.S. Gulf Coast polyethlyene production. Manufacturing facility that produces SARAN will restart in 2012 which will help Dow Packaging & Converting volumes.
We currently have a Trefis price estimate of $32 for Dow Chemical, which is in line with the market price.
Consolidating Seeds and Traits Business
Through its subsidiary Dow AgroSciences, Dow has formed a partnership with the Dutch company The Royal Barenbrug Group to develop and commercialize advanced germplasm in forage seeds. The move will help Dow expand into forage grass seeds. Dow AgroSciences will hold a minority stake in Barenbrug Holding B.V which is part of The Royal Barenbrug Group. Barenburg will build a new facility in Brazil to process hybrid Brachiaria and produce other tropical grasses and legumes. 
Dow AgroSciences is one of the biggest players in seeds and traits. SmartStax, which was first developed in 2010 in collaboration with Monsanto, helped the volumes surge by 27% in 2011 in oils, seeds and traits business. Dow’s South American business should also get a boost from POWERCORE which was launched in May this year. Agricultural science products contribute around 10% to the stock price as per our estimates.Notes:
- Dow and Aksa form joint venture for carbon fiber and derivatives, July 3, 2012 plastemart.com [↩]
- Dow AgroSciences, Royal Barenbrug ink strategic agreement, July 1, 2012, menafn.com [↩]