Dow announced on June 2 that it has sold 50 percent of its stake in joint venture DowAksa to joint venture partner Aksa Turkey (Aksa Akrilik Kimya Sanayii A.Ş).
Dow is expected to gain $125 million from this sale. After deducting debt, its enterprise value is approximately ten times the projected operating earnings before interest, taxes, depreciation and amortization (EBITDA) for 2025.
Dow said that the decision to withdraw from the joint venture was in line with the company's "best owner" strategic thinking, that is, to focus on its core high-value downstream business. The proceeds from this transaction will be used to support the company's balanced capital allocation strategy.
DowAksa was established in June 2012 and is a globally leading industrial-grade carbon fiber manufacturer. Its headquarters is located in Yalova, Turkey, and it is dedicated to providing large-scale, full-service, and fully integrated carbon fiber solutions for the industrial sectors of transportation, infrastructure, and energy markets. We mainly produce large and small fiber bundles of 3K, 12K and 24K, and our products cover raw fibers, carbon fibers, resins, fabrics and prepregs, etc.
In April this year, the Bodo Moller Chemie Group reached a strategic partnership with DowAksa, incorporating DowAksa's carbon fiber products into its rich product portfolio, including high-quality carbon fibers and carbon fiber reinforced intermediate products such as fabrics, prepreg materials and pultruded profiles, etc.
Dow's current move, on the surface, seems to be part of its capital allocation strategy, but the underlying contradiction lies in the coexistence of overcapacity in the carbon fiber industry and the growth of high-end demand.
The global carbon fiber production capacity is expected to increase by 9.23% in 2025, but the actual operating rate is less than 70%, especially in the field of large-filament carbon fiber, where competition has become extremely fierce. Even more magically, the United States is expected to account for 40% of the carbon fiber market for wind energy, while Chinese manufacturers are expanding their production at a frantic pace. By 2025, the scale of China's carbon fiber market is projected to reach 12.388 billion yuan (RMB), with a growth rate that may far exceed the global average.
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