Dow Inc. DOW has announced an investment in Xycle, a Rotterdam-based leader in advanced recycling technology, alongside other investors such as ING, Invest-NL, Polestar Capital and Vopak. This marks a key step in Dow’s efforts to convert plastic waste into valuable materials and promote a circular plastics economy by expanding access to sustainable feedstock. 

The combined funds, including equity and senior debt, will support the construction of Xycle's first large-scale advanced recycling facility in the Port of Rotterdam. The plant is expected to be operational by the fourth quarter of 2026, with a planned annual capacity to process 21 kilotons of plastic waste. Dow will offtake the circular feedstock produced to make new circular plastics, which are in high demand from global customers and brands.

Xycle’s advanced recycling technology employs low-temperature pyrolysis to effectively break down hard-to-recycle plastic waste into pyrolysis oil, boosting the liquid fraction that can be used as feedstock in cracker processes for new plastic production. This circular feedstock can be transformed into virgin-quality plastics for high-end applications, including food-grade packaging, medical items and automotive parts. Xycle’s technology complements DOW’s expanding global recycling portfolio. 

The modular design of Xycle’s facilities enables scalable production, adapting to changing demand while ensuring operational flexibility and efficiency. Looking ahead, Xycle plans to build additional advanced recycling plants worldwide, using larger reactors to increase the capacity of each facility to 100 kta.

Dow’s investment in Xycle is part of a comprehensive strategy to convert plastic waste and other alternative feedstocks into 3 million metric tons of circular and renewable solutions each year. Complementing the mechanical recycling efforts Dow is advancing, Xycle’s advanced recycling process enables a variety of plastic waste to be transformed into virgin-quality circular materials. Xycle’s technology can handle mixed plastic waste that is currently non-recyclable through mechanical methods, which often ends up in landfills or incineration.

DOW’s shares are down 34.9% in a year against the industry’s 11.6% decline.

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Dow, on its fourth-quarter call, said that it expects to gain from the completion of its near-term incremental growth projects and increased focus on operational discipline in 2025. It is optimistic to see a further increase in demand in attractive end markets such as packaging, energy and electronics. DOW expects its strong balance sheet and differentiated portfolio to allow it to deliver on its capital allocation priorities.

DOW’s Rank & Key Picks

DOW currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, ArcelorMittal MT and Axalta Coating Systems Ltd. AXTA

Carpenter Technology currently carries a Zacks Rank #2 (Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%. The company's shares have soared 218.2% in the past year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for ArcelorMittal’s current-year earnings is pegged at $3.72 per share. MT, which carries a Zacks Rank #2, surpassed the Zacks Consensus Estimate in three of the trailing four quarters but missed it in one, with an average earnings surprise of 4.11%.

Axalta Coating Systems, which currently carries a Zacks Rank #1, beat the consensus estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 16.3%, on average. AXTA’s shares have rallied 10.7% over the past year. 

 

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