Dow Enters Biocomposite Panel Business
Calgary, Alberta - May 17, 2001 — Dow Pipeline Ltd., a wholly-owned subsidiary of Dow Chemical Canada Inc., announced today that it has agreed to acquire a majority of the Manitoba assets of Isobord Enterprises, Inc., and enter the business of producing engineered composite panels made from wheat straw and Dow's polyurethane resin. Dow announced the new business following today's approval of the asset sale by the Court of Queen's Bench of Manitoba, Winnipeg Centre. Dow Pipeline Ltd. will be renamed at a later date to reflect the new composite panel business.
The purchase includes a manufacturing facility in Elie, Manitoba, Canada, that produces the wood-replacement products, according to Brad Money, business manager, Dow Polyurethanes New Business Development. "Isobord produces a unique product that fits well with Dow's established name in home construction and remodeling," Money said. "We are fortunate to be able to acquire an existing, modern manufacturing facility and have access to employees with the knowledge and expertise in the composite panel business rather than having to build from scratch in a green field situation." Money will lead the new business after the agreement closes, which is expected to be in mid-June. Details of the agreement were not disclosed.
"Dow is investing in businesses that are consistent with its strategy for growth. In addition, the composite panel products are a natural fit with other Dow products being sold in home construction and remodeling that use Dow polyurethane, which supports the company's intention of growing the polyurethane business. The composite panels also provide an environmental benefit of using an annually renewable resource, which fits with Dow's commitment to sustainable development," Money said. "When you combine Dow's expertise in process technology and polyurethane binders with the experience in composite board production of the Elie workforce, we have an excellent opportunity for improving and growing the business."
"We commend Dow and are pleased by its decision to enter the composite panel business. The Isobord panels fit with Home Depot's commitment to provide consumers with high quality, economically viable products that relieve pressure on our natural forest resources," said Mark Baker, executive vice president of merchandising/chief merchandising officer, for Home Depot. "Agrifiber products represent an emerging market, and we believe Dow's resources, know-how and reputation will be a strong factor in bringing environmentally-conserving wood replacement panels more into the mainstream with consumers." Home Depot is a distributor of Isobord products.
The Elie site includes a 215,000-square-foot manufacturing facility and two straw staging areas on 68-acres in Elie, which is near Winnipeg. The plant began operations in August 1998 and has about 70 employees. Following a review to determine business requirements, Dow hopes to be able to offer employment to most of the current employees shortly after the sale closes.
Isobord Enterprises has been in receivership since February. Arthur Andersen Inc. was named receiver and manager by the Manitoba Court and has continued to operate the business.
Agrifiber composite panels are made by combining finely chopped wheat straw with a polyurethane binder. The resulting biocomposite material is formed, pressed and trimmed to the desired size panels. The wood-replacement products can be used for kitchen counters, shelving, ready-to-assemble furniture, cabinets, door core, and floor underlay.
The products have received several environmental awards, including the Sustainable Development Award of Excellence from the Manitoba Round Table and the Salute to Clean Air Industry award from the Manitoba Lung Association. The use of straw and a polyurethane binder helps conserve forest products by using straw, an annually renewable resource. These composite panels do not use formaldehyde, which has been raised as a concern with other composite building materials. Using straw for composite panels reduces the need to burn straw in the fields, which has been a source of air pollution.
Dow's polyurethanes business, a leading supplier of polyurethane raw materials, offers one of the broadest lines of polyurethane products in the industry. Dow's polyurethane raw materials are used in producing rigid foams, flexible foams, adhesives, sealants, coatings, elastomers and agrifibers, as well as many other applications. Applications for these products cover a wide range of end uses, including cushioning for furniture and bedding, carpet backing, automotive seating and instrument panels, office furniture, flooring, and insulation for appliances, sheathing and roofing.
Dow Chemical Canada Inc., is a wholly owned subsidiary of The Dow Chemical Company (NYSE: DOW), headquartered in Midland, MI. Dow is a leading science and technology company that provides innovative chemical, plastic and agricultural products and services to many essential consumer markets. With annual sales of approximately $30 billion, Dow serves customers in more than 170 countries and a wide range of markets that are vital to human progress, including food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of Sustainable Development, Dow and its 50,000 employees seek to balance economic, environmental and social responsibilities.
For More Information Contact:
Kim Shea
Dow Polyurethanes
(989) 638-5688
kashea@dow.com
Victor Kroeger
Arthur Andersen
(403) 298-5954
victor.p.kroeger@ca.andersen.com