U.S. agricultural company Dow Chemical Co. topped first quarter profit in the latest quarter due to increasing demands for pesticides and increased margins at its performance plastics unit.

Dow Chemical's performance plastics unit saw a marginal improvement from 20.5% to 27.5% compared to last year, the sixth consistent quarterly increase.
The company's agricultural sciences unit profited from the increased demand for insecticides, herbicides and other crop protection products, most notably in Latin America.

"One-third of our business is in low-cost commodity, cyclical-type business, where my competition is state-owned enterprises," Dow Chemical Chief Executive Andrew Liveris shared to CNBC on Thursday, adding "My competition is racing to commoditize my products. That means I have to keep working them out of the portfolio and keep moving to areas of high-margin, high-technology."

Dow Chemical shares increased 1.5 % to US$35 on the New York Stock Exchange.

In line with revenue increase, Dow Chemical announced its plan to further strengthen its business. The company is currently seeking to divest its polypropylene licensing and catalyst unit and its plastic additives business.

Dow Chemical is among the number of chemical makers who have shifted away from low-profit commodity business into more in-demand products such as seeds and pesticides. Following the second quarter profit report, Liveris named the company's industrial paint business Epoxy, European building and construction and commodity chlorine derivatives branches as potential candidates for divestment.

"Here, we see the need for more dramatic interventions," Liveris commented. "These businesses are in the fix/take-action mode, which includes exploring all possibilities - including joint venturing or divesting them."

The three units produced US$6 billion in yearly revenue, according to Dow Chemical spokesperson Rebecca Bentley.

Some analysts, however, advised caution for Dow Chemical.

Key Private Bank research analyst Stephen Hoedt said, "Dow has to be careful with how much of the commodity business it offloads, given that is what is generating their margin upside."