Dow Sells Stake in Carbon Fiber Venture Net Gain of 125 Million Dollars Highlights Industry Challenges

Dow recently announced its exit from the DowAksa carbon fiber joint venture, selling its 50% stake to Turkish partner AKSA. The deal is expected to generate a net gain of $125 million for Dow, with the enterprise value estimated at 10 times the 2025 forecast operational EBITDA. Formed in 2012, DowAksa combined Dow’s expertise with AKSA's leadership in acrylonitrile and carbon fiber production, focusing on carbon fiber R&D and manufacturing.

This divestment reflects structural challenges in the carbon fiber industry. Despite global production capacity reaching 309,000 tons in 2024 and projected growth of 9.23% in 2025, utilization rates remain below 70%, with intense competition in large-tow carbon fiber markets. Regional disparities are also widening—while the US dominates 40% of the wind power market, China continues rapid expansion, and European capacity has dropped from 35% in 2015 to under 15% by 2024.

Globally, wind turbine blades (28.2%), sports and recreation (18.3%), and aerospace (16.9%) drive demand, with large-tow fibers (≥48K) used in industrial applications, while small-tow fibers (1-40K) dominate aerospace and sports sectors. In China, carbon fiber capacity hit 135,500 tons by end-2024, growing 12.73% annually. The rise of C919 aircraft (carbon fiber use at 12%) and low-altitude economies (eVTOLs, drones) continues to fuel demand.

Chinese firms are advancing on three fronts:

1. Aerospace and defense: Companies like Guangwei Composites and Zhongjian Technology lead with breakthroughs like ZT7 and ZT9 fibers.
2. Industrial-grade fibers: Players like Jiangsu Hengshen and Sinofibers are developing high-modulus products, including M50X, the first of its kind globally.
3. Low-cost applications: Firms like Jilin Chemical Fiber and Shanghai Petrochemical are strengthening competitiveness with technologies such as T800-grade dry-jet wet spinning.