- Argentina | 29 July 2017
How has Dow contributed to the development of Argentina’s petrochemical industry over the years?
Dow’s impact on Argentina’s petrochemical industry has been significant, employing up to 4,000 people and being recognized as the leader of the industry for the past 60 years. The company’s success is attributed to a combination of factors, including the country’s own competitive advantages in agribusiness and hydrocarbon industries, Dow’s alignment with these two industries, and the company’s strong reputation and presence in Argentina. Additionally, Dow’s subsidiary in Argentina is the company’s sixth largest in the world, despite Argentina being the 24th largest economy, and operates in two key platforms of the Argentine economy – agribusiness and the hydrocarbon value chain, including the plastics business. The company is also actively developing solutions and technology for the infrastructure and mining industries.
How important is Argentina to Dow’s global strategy?
Dow’s subsidiary in Argentina is disproportionately represented in terms of the company’s business presence in the country. The subsidiary is the company’s sixth largest in the world, and this is due to the fact that Dow operates in two key platforms of the Argentine economy. The country has a competitive advantage in agribusiness, where Dow is the third largest agrochemical player after Monsanto and Syngenta, and in the hydrocarbon industry, where Dow is the largest and best integrated petrochemical player. Additionally, Dow has solutions and technology for the developing infrastructure and mining industries in Argentina.
How does Dow see the potential impact of a shale revolution on Argentina’s petrochemical industry?
Dow draws parallels between the United States and Argentina, suggesting that a shale revolution could have a significant impact on Argentina’s petrochemical industry. The shale boom in the United States taught Dow that a quick reversal of production declines is possible after producers overcome learning curves and that investing in the boom too late can be detrimental. The impact of a shale revolution on the United States’ petrochemical industry was profound, with the industry’s on-going projects worth $140 billion, the creation of 500,000 new petrochemical jobs, and a move from a trade deficit in petrochemical products to a surplus of $30 billion by 2018. Argentina has shale resources that are 82% the size of those in the United States, and the impact of a shale revolution on its petrochemical industry could be massive, given the country’s larger ratio of resources to economic output and population.
What impact could a shale revolution have beyond Argentina’s petrochemical industry?
Dow believes that the value created upstream from a shale revolution in Argentina could reverberate throughout the entire energy value chain and beyond. Rather than viewing the country’s unconventional resources as just another exportable commodity, Dow sees the potential for development in four sectors – the oil and gas industry, petrochemical, power generation, steel, and other industries that intensively use raw hydrocarbon materials, industries that use petrochemical output to manufacture products like diapers, bottles, and more R&D departments. Creating a virtuous circle where value is sustainably generated throughout the value chain would require significant know-how, planning, and political decisions.