Dow Chemical Co said it agreed with Japan's Mitsui & Co Ltd to form a 50:50 joint venture to construct and operate a new chlor-alkali facility on the U.S. Gulf Coast.
The new facility, slated to have a capacity of about 800 kilotons per year, is expected to begin operations in mid-2013 and will be operated and maintained by Dow, the company said.
In a filing with the U.S. Securities and Exchange Commission, Mitsui said it will invest $140 million in the venture in which the two companies will have an equal stake.
Under the project, Mitsui will sell chlorine mainly in Asia, including Japan, while Dow will be selling caustic soda in the U.S, a Mitsui spokesperson said.
Chlorine and caustic soda, products of the chlor-alkali sector, are basic materials in the chemical processing industry and used in the manufacturing of paper, textile, pharmaceutical and polyvinyl chloride.
The venture will create about 50 long-term jobs at the location and about 500 construction jobs during construction, Dow said.
Construction of the plant -- at Dow's Freeport, Texas manufacturing complex -- is expected to begin in the fourth quarter of this year, and will replace the company's previously announced 'Chlorine 7' project.
Shares of Dow closed down 2 percent at $23.72 Wednesday on the New York Stock Exchange. (Reporting by Antonita Madonna Devotta in Bangalore and Yuko Inoue in Tokyo; Editing by Roshni Menon)