The Dow Chemical Company (Midland, MI), which makes products for the coatings and other markets, reported third quarter sales of $12 billion, down 22% from Q3 2008, but up 6% from Q2 2009. Net income from continuing operations for the quarter was $799 million, compared with $440 million for the same quarter in 2008.
According to the company, structural cost reductions are ahead of company goals, with cost savings of more than $380 million in Q3 and more than $1 billion for the year. The company has achieved more than 110% of the 12-month cost synergy run-rate goal for the integration of Rohm and Haas, which began six months ago.
Sales in coatings and infrastructure were $1.3 billion for the third quarter, down 22% from Q3 2008, but up 7% from Q2 2009. Volume increases were reported in Asia Pacific, with China architectural coatings reporting robust growth compared to last year. All other geographic areas posted double-digit volume declines, except IMEA where volume was flat. The company says that there was unfavorable demand for insulation products and construction chemicals in Dow Building and Construction and architectural paints and industrial coatings in Dow Coating Materials. Demand for architectural coatings in Asia Pacific has stabilized due to government stimulus spending in China. Adhesives and functional polymers reported double-digit volume gains in Asia Pacific.
In the performance products segment, sales were $2.4 billion, down 33% from the third quarter of 2008, but up 16% compared to Q2 2009. The largest volume declines were in North America and Europe. Polyurethanes sales were down, but volume was flat compared to the same period last year. Epoxy sales fell, and in performance fluids, polyglycols and surfactants, sales were lower than last year because of a contraction in industrial lubricant demand and a weakness in construction-related applications, such as foam-control aides in cement and paint.
The performance systems segment saw sales of $1.5 billion, down 29% compared to Q3 2008, but up 5% from the previous quarter. Formulated systems posted volume declines in all areas except Latin America and Asia Pacific, where government spending programs in China stimulated demand in infrastructure rehabilitation applications. Epoxy systems also reported strong demand for wind energy applications in China. Compared to the previous quarter, polyurethane systems reported a double-digit demand improvement in Russia.
The basic plastics segment was down 32% from last year’s third quarter, with sales of $2.6 billion, but sales rose 11% from Q2 2009. In basic chemicals, sales were $568 million, down 49% from last year, and down 3% from the previous quarter. The electronic and specialty materials segment had sales of $1.3 billion, down 15% from Q3 2008, but up 8% from Q2 2009. The health and agricultural sciences segment reported sales of $796 million, down 20% from last year and down 34% from Q2 2009, reflecting typical season decline.