Dow Signs Deal with Nanoco

Dow Electronic Materials, a unit of The Dow Chemical Company (DOW - Analyst Report), has entered into a global licensing agreement with Nanoco Group PLC for Nanoco’s cadmium-free quantum dot technology. The companies did not disclose the financial terms of the agreement. However, Nanoco will be entitled to receive royalty payments from the sale of cadmium-free quantum dots.

According to the deal, Dow Electronic materials will hold exclusive worldwide rights for sale, marketing and manufacture of Nanoco’s cadmium-free quantum dots for use in electronic displays. Nanoco will also offer any technology advances to its cadmium-free quantum dot technology as long as the deal is in place. Nanoco will also provide technical and marketing assistance to Dow. The collaboration will provide advanced materials solutions to customers.

Under the agreement, Nanoco’s leading technology will be combined with Dow’s large-scale manufacturing capability along with its strong sales, marketing and distribution network. Dow also has plans of building production capacity in Asia and intends to supply high-performance materials to its customers in the display and semiconductor-related segments. Commercial production is expected to begin in the first half of 2014.

Dow believes that Nanoco’s cadmium-free quantum dots will set a new standard in the display industry as it can improve the color display of LCD in a cost effective manner as well as by avoiding the use of heavy metals.
Dow Electronic Materials is a global supplier of materials and technologies to the electronics industry. The unit comprises of teams of talented Dow research scientists and application experts who work closely with customers, providing solutions, products and technical service necessary for next-generation electronics.

Dow currently retains a short-tem Zacks Rank #3 (Hold).

Other companies in the chemical industry with a favorable Zacks Rank are Arkem S.A. (ARKAY), BASF SE (BASFY) and Air Products and Chemicals (APD - Analyst Report). While Arkem is carrying a Zacks Rank #1 (Strong Buy), both BASF and Air Products hold a Zacks Rank #2 (Buy).