An $11 billion joint plastics venture
between Dow Chemical Co (DOW.N) and a unit of Kuwait Petroleum
Corp will be based in Michigan, the two companies said in a
statement on Sunday.
The venture will be named K-Dow Petrochemicals and the
chief executive will be James Fitterling, currently business
group president at Dow's plastics division, the companies said.
Dow's headquarters are in Midland, Michigan. The site of
the new headquarters has yet to be decided but would be
somewhere in the southeast of the U.S. state.
The two teamed up for the 50-50 joint venture in January,
in a deal that will link the Middle East oil producers' vast
energy supplies with Dow's industry-leading market reach.
The joint venture will manufacture and sell chemicals used
in products ranging from plastic bottles, compact disks and
computers to agricultural compounds and have expected sales of
$11 billion at its inception.
Dow's links to the Kuwaiti company go back a decade to the
EQUATE joint venture. The two companies have also joined forces
through their MEGlobal and Equipolymers joint ventures in 2004.
With the deal, Kuwait will increase its reach further down
the chain of products that are derived from its oil and gas.
(Reporting by Simon Webb; editing by )
Wal-Mart Stores Inc (WMT.N)
presented a colorful, casual line of youthful looks for kids
and teens on Saturday at a fashion show that previewed the
mass-market chain's new low-cost offerings for back to school.
The world's largest retailer has been careful not to
accentuate the fashion quotient in its clothing offerings this
year ever since a disastrous push into more stylish gear in
late 2005 alienated its core customers looking for basics.
Still, the company's presence at the Fashion on the Square
runway show in this city's posh downtown Union Square was a nod
to the importance of youth trends when it comes to selling
families, and showcasing young women and girls' denim brand
l.e.i. from Jones Apparel Group Inc (JNY.N) and surfer brand
Op, which it has licensed from Iconix Brand Group (ICON.O).
Little girls in jeans and T-shirts with pink ribbons in
their hair sauntered down the runway.
The image of Hannah Montana, the popular Disney television
character who is a student by day but a pop star by night,
emblazoned many T-shirts, whether sparkly pink, bright fuchsia,
or adorned with images of silver and gold guitars.
Boys sported mismatched plaids in khakis and blues, or
bright Op T-shirts in sunset colors.
Wal-Mart, one of the event's sponsors, stayed relatively
under the radar at the fashion show, which included looks by
other designers, including Chris March, who appeared on last
season's TV reality show "Project Runway."
Only after the parade of some 30 kids and teens was over,
an announcer shouted through a microphone: "It's one of their
first real fashion shows so give it up for Wal-Mart!"
Two years ago, in a bid to take on competition from
mass-market chains like Target Corp (TGT.N) or Kohl's Corp
(KSS.N), Wal-Mart began selling hipper, cheap-chic items like
skinny jeans and velvet blazers.
But the push into trendier looks backfired, and left
Wal-Mart with excess inventory it was forced to mark down,
hurting profit margins. Moreover, the strategy seemed to fly in
the face of Wal-Mart's focus on the needs of its lower-income
shoppers, a focus that the retailer has since recaptured.
A Wal-Mart spokeswoman attending the show said the clothing
on display showed "good value and good style for the kids for
back to school."
Y'Anad Burrell, the founder and creative director of the
show, now in its fifth year, said she first approached Wal-Mart
looking for corporate sponsorship, but then decided to include
"It's a fashion show," Burrell said. "Let's show some of
their clothes on the runway."
Still, she acknowledged that Wal-Mart's clothing may be
affordable but doesn't necessarily push the envelope when it
comes to cutting-edge design.
"They're not fashion trailblazers," she said.
(Editing by Eric Beech)
The European Central Bank is trying to convince people in the eurozone that taking a tough stand on inflation will get them through lean economic times, arguing that long-term gains warrant short-term pain.
"There is a particular need to speak to citizens on inflation and monetary policy right now," Natixis economist Sylvain Broyer said after ECB president Jean-Claude Trichet laid out the bank's stance in an interview with four major eurozone newspapers.
Public opinion is emerging as key ground to be won since the bank raised its main lending rate despite signs that economic activity was slowing sharply in the 15-nation eurozone.
Politicians have urged the ECB to ease policies that determine credit conditions for around 320 million people, though they know its main goal is to keep inflation, which hit a record 4.0 percent last month, in check.
The ECB argues that sustainable growth is best served by making sure people know the bank will target inflation of just below 2.0 percent, even if that means letting the economy contract for some months.
"So far it's been easy," commented Bank of America economist Gilles Moec, pointing to low interest rates a few years ago when many questioned whether inflation had finally been beaten.
"I don't think any politician in France or Italy dreamed of seeing interest rates at 2.0 percent just three years after monetary union" in 1999, he said, referring to conditions that also fueled housing booms in countries like Spain and Ireland.
"Now we're getting into the territory where it hurts, where its painful."
Like economies around the world, the eurozone has been hit by high oil and food prices and tighter credit sparked by the global financial crisis that have eaten away at household budgets and curbed spending on many non-essential items.
Eurozone exporters are also hampered by the euro's rise to record highs above 1.60 dollars that make their products more expensive abroad, and weaker economic conditions in key trading regions that have reduced demand further.
The eurozone's trade balance fell into deficit in May, while industrial output slumped and growth forecasts were scaled back.
That has forced Trichet to make his case to the public, which he often does by referring to "the poorest and the most vulnerable that can do the least to protect themselves from rising inflation."
He argues for example that rising wages following the oil shocks of the 1970s created mass unemployment in Europe, compared with 15.7 million jobs generated since the single currency was born nine years ago.
"Speaking to several newspapers is a good way to communicate to the wider public," Commerbank economist Michael Schubert commented.
The central bank's policy he added, "completely depends on inflation expectations," or widespread belief that prices will rise sharply or not in the future.
That can influence decisions from whether or not to buy a home appliance to business investments involving tens of millions of euros or long-term interest rates that require governments to pay massive sums to finance their budgets.
Moec said he thought Trichet's remarks were addressed to European leaders who seek to influence the ECB, the independence of which was laid down in the Maastricht Treaty.
"Let's not get into a debate on the mandate," was the message Moec heard, "because we already have systems in place" to ensure politicians' views were heard.
While ECB independence is firmly established, efforts to gain influence "could have some consequences if it was seen elsewhere, especially in the US or the UK, that there is some internal fragility in the system," the Bank of America economist said.
Broyer at Natixis also saw tension building between European Union leaders like French President Nicolas Sarkozy and the ECB, saying: "I think it will enter a more strained phase."
The euro's success would "radically transform the European economy" and force governments to reform obsolete industrial methods, with the past nine years just "the beginning of the phenomenon," he added.
"What does not work today is the European political model," Broyer said after Ireland rejected the EU's draft Lisbon Treaty designed to ease future englargement.
Sarkozy is to visit Ireland Monday to explore ways of resolving the snub.
"We need common economic and social policies and it is up to Sarkozy and his friends to do it," Broyer said.
Instead of trying to deflect public discontent onto the ECB, politicians should acknowledge "they are unable to get Europe moving, as we saw again with the Irish 'No'."