$11B Plastics Venture Seeks Detroit HQ Site

MIDLAND, MI-An $11 billion joint venture between the Dow Chemical Co., based here, and the Kuwait government-owned Kuwait Petroleum Corp. plans to place a world office headquarters somewhere in Southeast Michigan, the two companies announced this morning. Though based in Midland, in the center of the state, Dow officials say the venture’s office HQ needs to be near the Detroit Metropolitan Airport, which is west of Detroit in the Downriver area. The venture will be called K-Dow Petrochemicals.

A Dow spokesman tells GlobeSt.com that he doesn’t know how much space the company would seek, though the venture has confirmed that it will employ up to 800 people in the next few years. James Fitterling, currently the business group president for Dow Basic Plastics, will become the CEO when the venture begins operations. “It’s highly unlikely that we would want the K-Dow headquarters in Midland,” the spokesman says. “The Kuwaitis wanted it to be close to an International airport, for easy access. Also, we want to make sure that K-Dow develops a distinct corporate culture, and wouldn’t be just an offshoot of Dow. I expect that we won’t wait too long to make a decision, it should be in the next few months.”

The company was formed after Dow, in December, agreed to sell a 50% interest in its global businesses to the Kuwait government. The venture will make plastic materials such as polyethylene, ethyleneamines, ethanolamines, polypropylene and polycarbonate. It’s not clear where the venture will have manufacturing operations.

Dow says it is talking with state and local officials about incentive packages on where to locate. However, the spokesman says a site has not yet been chosen. A Michigan Economic Development Corp. spokeswoman could not comment in time for this article.

Ed Wujek, a local office broker with CB Richard Ellis, estimates that for 800 employees, the venture will need at least 200,000 sf. “There is a handful of existing spaces in the Southeast Michigan office market the company could back into, such as the Collins and Aikman space in Southfield, there’s about 300,000 sf there.” He tells GlobeSt.com that even closer to the airport is Dearborn, with about 750,000 sf of available space and several hundred thousand more space about to be delivered in the next two years. “Historically Dearborn has been the Ford city, but the community is making a push to become more diversified,” Wujek says. “A deal with Dow could be a good idea. There’s lots of available space there.” Other brokers mentioned that downtown Detroit has large pockets available, such as the space that Comerica is vacating due to its relocation to Dallas.