Dow Chemical Company

From Wikipedia, the free encyclopedia

The Dow Chemical Co.
Type of Company	Public (NYSE: DOW)
Founded	1897
Headquarters	Midland, Michigan, USA
Key people	Andrew N. Liveris, CEO, President, & Chairman of the Board of Directors
Industry	Manufacturing
Products	Chemicals, Plastics, Agricultural Products, and other Specialized Products & Services
Revenue	$46.307 Billion USD (2005)
Net income	$4.515 Billion USD (2005)
Employees	42,413 (2005)
Website	www.dow.com

The Dow Chemical Company (NYSE: DOW TYO: 4850 ) is an American multinational corporation headquartered in Midland, Michigan.

Contents 1 Overview 2 Products 2.1 Performance plastics 2.2 Performance chemicals 2.3 Agricultural sciences 2.4 Basic plastics 2.5 Basic chemicals 2.6 Hydrocarbons and energy 3 History 4 Dow Corning 5 Board of directors 5.1 Major Sponsorships 6 Outlook 7 Notes 8 External links 9 Further reading

[edit] Overview

The Dow Chemical Company is currently the largest chemical manufacturer in the World. Dow Chemical is the leading Company and major provider of plastics, chemicals, and agricultural products. With presence in 156 Countries and more than 45,000 employees around the world, Dow is one of the top world companies in innovation and research and development,^{[citation needed]} with more than $1 billion annual expenditure in R&D and the single largest concentation of PhD and Engineers in the United States.^{[citation needed]} Its vision under the current CEO, Mr. Andrew Liveris, is to contribute to create a better world.

The company was founded in 1897 by Canadian-born chemist Herbert Henry Dow, who had invented a new method of extracting the bromine that was trapped underground in brine at Midland, Michigan.^[1] While at first the company sold only bleach and potassium bromide, Dow today has seven major operating segments, with a wide variety of products offered by each.^[2] The company's 2005 sales totaled $46.3 billion, with a net income of $4.5 billion. Traded on the New York Stock Exchange, as of 2005 Dow has about 105,000 shareholders.^[3]

Dow Chemical is an active member of the American Chemical Association, and an active partner in different programs and initiatives in both the World Bank and United Nations.

[edit] Products

Dow is the world's largest producer of plastics, including polystyrene, polyurethanes, polyethylene, polypropylene, and synthetic rubbers. It is also a major producer of the chemicals calcium chloride, ethylene oxide, and various acrylates, surfactants, and cellulose resins. It produces many agricultural chemicals, perhaps being most famous for its pesticide Lorsban.^[4] Its most well-known consumer products include Styrofoam brand insulation. Two former Dow product lines, Saran wrap and Ziploc bags, have been sold to S. C. Johnson & Son.

[edit] Performance plastics

Performance Plastics make up 25% of Dow's sales^[5], with many products designed for the automotive and construction industries. The plastics include polyolefins such as polyethylene and polypropylene, as well as the polystyrene most often seen in Styrofoam^TM insulating material. A complete range of epoxy resin intermediates and products are manufactured by Dow, including bisphenol A and epichlorohydrin. Polyurethane, polyether polyols and specialty acrylates are all derived from ethylene oxide (EO). The Saran^TM range of resins and films is based on polyvinylidene chloride (PVDC).

[edit] Performance chemicals

The Performance Chemicals (17% of sales) segment produces materials for water purification, pharmaceuticals, paper coatings, paints and advanced electronics. Major product lines include nitroparaffins such as nitromethane, used in the pharmaceutical industry and manufactured by the Angus Chemical Company^[6], a Dow subsidiary. Important polymers include Dowex^TM ion exchange resins, acrylic and polystyrene latex, as well as Carbowax^TM polyethylene glycols. Specialty chemicals are used as starting materials for production of agrochemicals and pharmaceuticals.

[edit] Agricultural sciences

Agricultural Sciences provides 7% of sales, and are responsible for a range of insecticide s (such as Lorsban^TM) and fungicides. Genetically modified plant seeds are also an important, growing area.

[edit] Basic plastics

Basic plastics (26% of sales) end up in everything from diaper liners to beverage bottles and oil tanks. Products are based on the three major polyolefins – polystyrene (such as Styron^TM resins), polyethylene and polypropylene.

[edit] Basic chemicals

Basic chemicals (12% of sales) are used internally by Dow as raw materials, and are also sold worldwide. Markets include dry cleaning, paints and coatings, snow and ice control and the food industry. Major products include ethylene glycol, caustic soda, chlorine, vinyl chloride monomer (VCM, for making PVC) and calcium chloride. Ethylene oxide (EO) and propylene oxide and the derived alcohols ethylene glycol and propylene glycol are major feedstocks for the manufacture of plastics such as polyurethane and PET.

[edit] Hydrocarbons and energy

The Hydrocarbons and Energy operating segment (13% of sales) oversees energy management at Dow, succeeding in raising energy efficiency by 92% since 1990.^[7] Fuels and oil-based raw materials are also procured. Major feedstocks for Dow are provided by this group, including ethylene, propylene, 1,3-butadiene, benzene and styrene.

[edit] History

The company originally sold only bleach and potassium bromide, achieving a daily bleach output of 72 tons a day in 1902. Early in the company's existence, a group of British manufacturers attempted to drive Dow out of business by cutting prices. Dow survived by cutting prices in response and, although losing about $90,000 in income, began to diversify its product line.^[8] Even in its early history, the company set a tradition of rapidly diversifying its product line. Within twenty years, Dow had become a major producer of agricultural chemicals, elemental chlorine, phenol and other dyestuffs, and magnesium metal.

In the 1930s, Dow began production of plastic resins, which would grow to become one of the corporation's major businesses. Its first plastic products were ethylcellulose, made in 1935, and polystyrene, made in 1937.

In 1930, Dow built its first plant to produce magnesium extracted from seawater rather than underground brine. Growth of this business made Dow a strategically important business during World War II, as magnesium became important in fabricating lightweight parts for aircraft. Also during the war, Dow and Corning began their joint venture, Dow Corning, to produce silicones for military and later civilian use. In 1942 Dow began its foreign expansion with the formation of Dow Chemical of Canada in Sarnia, Ontario to produce styrene for use in styrene-butadiene synthetic rubber.

In the post-war era, Dow began expanding outside North America, founding its first overseas subsidiary in Japan in 1952, with several other nations following rapidly thereafter. Based largely on its growing plastics business, it opened a consumer products division beginning with Saran wrap in 1953. Based on its growing chemicals and plastics businesses, Dow's sales exceeded $1 billion in 1964, $2 billion in 1971, and $10 billion in 1980.

Today, Dow is the world's largest producer of plastics; with its 2001 acquisition of Union Carbide, it has become a major player in the petrochemical industry as well.

On August 31, 2006 Dow announced that it had plans to close facilities at three locations:^[9]

• It will shut down all of its production in Sarnia, Ontario by the end of 2008.
• One plant (Dow terminology for a production unit) at its site in Porto Marghera (Venice), Italy, which had been shut down for planned maintenance earlier that month, will not be restarted.
• Two plants at its major site in Fort Saskatchewan, Alberta were to be shut down by the end of October 2006.

[edit] Dow Corning

Main article: Dow Corning

Equally owned by Dow and Corning, Inc. (formerly Corning Glass Works), Dow Corning was founded in 1943 by the two companies as a joint venture. The company's focus is silicon-based products and technology.^[10] Dow Corning in turn owns 63% of the Hemlock, Michigan-based Hemlock Semiconductor Corporation, which manufactures polycrystalline silicon for semiconductor chips.^[11]

Dow Corning manufactured silicone breast implants, which were the cause of controversy and legal liability in the 1980s and 1990s (see below.)

[edit] Board of directors

Current members of the board of directors of The Dow Chemical Company are Arnold Allemang (who is also a senior adviser to the company); chemistry professor Jacqueline Barton; former Boeing manager James A. Bell; Whirlpool Corporation chairman and CEO Jeff Fettig; former U.S. Secretary of Commerce Barbara Franklin; Dow chairman and CEO Andrew N. Liveris; Dow CFO Geoffery E. Merszei; former Dow Brazil finance director J. Pedro Reinhard; Illinois Tool Works Inc. vice chairman James Ringler; Duke Energy Corporation president Ruth Shaw; and Claris Capital chairman Paul Stern (who is Dow's presiding director and a member of the Council on Foreign Relations.)^[12]

[edit] Major Sponsorships

In September 2004, the company obtained the naming rights to the Saginaw County Event Center in Saginaw, Michigan; the center is now called the Dow Event Center. The Saginaw Spirit (of the Ontario Hockey League) plays at the Center, which also hosts events such as professional wrestling and live theater.^[13][14]

In October 2006 the company bought the naming rights to the stadium used by the Single-A Minor League baseball team located in its hometown of Midland, Michigan. The stadium (which opens in April 2007) is called Dow Diamond. The Dow Foundation played a key role in bringing the team, the Great Lakes Loons, to the city.

The company also sponsors a global running relay to highlight the need for better drinking water in locations around the globe. The run will roughly follow the 41st North parallel and cover nearly 12,000 miles. The run is organized by the Blue Planet Run Foundation.

[edit] Outlook

This article or section contains information about scheduled or expected future events. It may contain information of a tentative nature and the content may change dramatically as the event approaches and more information becomes available.

Dow CEO Andrew N. Liveris called 2005 the company's "best year ever" with operating profits of $5.4 billion, a jump of 56.5% compared with the previous year. ^[15] Net income rose more than 60% to $4.5 billion, on sales of $46.3 billion. 2006 looks as if it could be even better, with first-quarter net earnings of $1.2 billion. ^[16] All this is occurring in the context of adverse operating conditions, caused by high energy & raw material costs, and the effects of two damaging hurricanes.

Liveris supports the vertically integrated approach used at Dow, which produces everything from basic chemical feedstocks to high value products such as pesticides and reverse osmosis membranes. These value-adding product chains, along with Dow's wide product range, help the company to weather the storms of the global economy. Despite this, high energy and feedstock costs may begin to take their toll, particularly if global demand begins to fall just as supply is rising.

Like many chemical companies, Dow is facing pressures of regulation in the US and Europe, particularly as the EU introduces its new REACH policy. Litigation costs in the US taken over by Dow as a result of its 2001 takeover of Union Carbide also remain a concern.

For these reasons the company is looking to the Middle East and Asia for new projects. In Kuwait Dow is constructing (with PIC of Kuwait) a new world-scale ethane cracker for production of ethylene, along with an ethylene oxide/ethylene glycol plant and (for 2008) a facility for production of aromatic hydrocarbons. In Oman, the company is working with the Oman government to build a new world-scale polyethylene plant. In China, the company is collaborating with Shenhua Group (the country's largest coal mining company) to improve catalyst efficiency to allow viable conversion of coal to olefins. Dow is also seeking to expand its R&D presence in Asia, adding 600 jobs in Shanghai by the end of 2007, and the company may open up a large R&D center in India.

The joint ventures planned for Asia are typical of Dow's "asset-light" approach, which works by offering a combination of intellectual property and money in exchange for a share in a world-scale production facility. At the same time, the company is considering selling a share of some of its existing assets in order to free up cash.

In June 2006 Liveris announced Dow's safety and environmental goals for 2015: ^[16]

• 75% reduction in environmental, health and safety indicators from 2005. The company aims to have no fatalities, and a reduction in injuries, spillages and leaks.
• 25% increase in energy efficiency.
• 2.5% annual reduction in greenhouse gas emissions intensity.

Liveris expects these goals to be reached predominantly with fossil fuels, through energy conservation and reduction of energy intensity, as he does not expect alternative energy to play a major role for at least 10-20 years.

[edit] Notes

[edit] External links

• The Dow Chemical Company
• Dow History
• Dow Chemical Corporate News
• Dow Chemical Company Information from Hoovers

[edit] Further reading

• E. Ned Brandt. (2003). Growth Company: Dow Chemical's First Century. Michigan State University Press. ISBN 0-87013-426-4
• Jack Doyle. (2004). "Trespass Against Us: Dow Chemical and the Toxic Century." Common Courage Press. ISBN 1-56751-268-2

Dow Chemical Co.

Corporate Directors: Arnold Allemang | Jacqueline Barton | J. Michael Cook | Willie Davis | Jeff Fettig | Barbara Franklin | Andrew Liveris | Keith McKennon | Pedro Reinhard | James Ringler | Harold Shapiro | Ruth Shaw | William Stavropoulos | Paul Stern

Assets & Products: Lorsban | Polystyrene (Styrofoam) | Saran Wrap | Silly Putty | Union Carbide

Annual Revenue: $40.2 billion USD (23% FY 2004) | Employees: 43,203 | Stock Symbols: NYSE: DOW | Website: www.dow.com