Union Carbide to Expand, Restructure, Add Products

Union Carbide Corp. announced Thursday that it will seek to restructure its three worldwide businesses, forming separately incorporated companies with the corporation serving as a holding company.

Robert D. Kennedy, chairman, also unveiled plans to spend $450 million to expand, improve and add product lines.

Kennedy revealed the new strategies after the board of directors approved a management recommendation seeking the new structuring. The structuring proposal must, however, be approved by shareholders before it can take effect.

“Given the complexity of the actions required in the many countries in which (Union Carbide) operates the move will take careful planning over an extended period,” Kennedy said.

New Texas Facility

“We see it as an extremely worthwhile action that enables each business to focus on being a leader in its own specific global enterprises, with greater flexibility to take advantage of market and investment opportunities,” Kennedy said.

Kennedy also revealed plans to spend $50 million to add and improve production at a plant in Seadrift, Tex. Some of the funds will be used to develop a reactor that would produce a new family of “rubber-like, olefin Flexomers.” He said a reactor currently at the Texas site would be converted to new production.

Also, the company plans to construct a state-of-the-art compounding facility for “medium and high-voltage semiconductive products for the power cable market,” Union Carbide said in a written statement. The new facility in Seadrift would be completed in 1989.

Kennedy also said the company would spend $400 million for up to 1.2 billion pounds of ethylene oxide glycol capacity to be phased in until the 1990s. Kennedy said the effort would expand Union Carbide’s capacity to produce ethylene oxide by 50%. The expansion will involve plants in Seadrift and Taft, La.

The board also approved a proposed joint venture with Allied Signal’s UOP subsidiary. The deal will combine UOP with Carbide’s catalysts, absorbents and process systems businesses.

“These developments underscore our commitment to make structural changes and the investments needed to compete in a rapidly changing business environment,” Kennedy said.

Carbide’s three worldwide businesses are chemicals and plastics, industrial gases and carbon products.