Dow Chemical 2013 Annual Report Download - page 65

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2012 Versus 2011
Agricultural Sciences sales were $6,382 million in 2012, up 13 percent from $5,655 million in 2011. Compared with 2011,
volume increased 10 percent and price was up 3 percent. Regionally, North America reported 27 percent sales growth while
Latin America and Asia Pacific also reported strong increases. Sales growth was reported in the Seeds, Traits and Oils and Crop
Protection businesses due to new product launches and the continued ramp up of new technologies. Sales of Seeds, Traits and
Oils increased 27 percent compared with 2011 driven by strong growth in the corn, soybean and healthy oils portfolios.
SmartStax® technology sales more than doubled from 2011 performance, driven by the 2012 introduction of POWERCORE™
Insect Trait Technology in Latin America and REFUGE ADVANCED® in North America. Crop Protection sales increased 10
percent, with volume up 8 percent and price up 2 percent. New Crop Protection product sales were up 19 percent compared
with the year ago period with spinetoram insecticide up 50 percent and double-digit growth in aminopyralid herbicide and
pyroxsulam herbicide.
EBITDA for 2012 was a record $977 million, compared with $913 million in 2011. EBITDA increased as sales volume growth
in Seeds, Traits and Oils and Crop Protection combined with selling price increases more than offset increased investment in
R&D and SG&A to support continuing growth initiatives.
Agricultural Sciences Outlook for 2014
Agricultural Sciences sales for 2014 are expected to grow above the levels achieved in 2013 with growth in all geographic
areas. A continuation of 2013 industry momentum is anticipated to be tempered by a greater level of uncertainty around crop
commodity prices. The Seeds, Traits and Oils business expects gains in corn from the continued ramp up of SmartStax®
technology, as well as growth in the soybean portfolio. The Crop Protection business is expected to experience continued
growth from IsoclastTM insecticide, pyroxsulam herbicide, spinetoram insecticide, penoxsulam herbicide and aminopyralid
herbicide. Investments in technology, capacity and geographic reach in the Seeds, Traits and Oils business remain a priority.
PERFORMANCE MATERIALS
The Performance Materials segment consists of the following businesses: Amines; Chlorinated Organics; Dow Automotive
Systems; Dow Formulated Systems; Dow Oil, Gas & Mining; Dow Plastics Additives; Epoxy; Oxygenated Solvents;
Polyglycols, Surfactants & Fluids; Polyurethanes; and Propylene Oxide/Propylene Glycol ("PO/PG"). The segment also
includes the results of Map Ta Phut Olefins Company Limited and a portion of the results of Sadara Chemical Company, both
joint ventures of the Company.
The segment included Dow Haltermann until it was fully divested at December 31, 2011.
Performance Materials
In millions 2013 2012 2011
Sales $ 13,415 $ 13,608 $ 14,647
Price change from comparative period — % (6)% 12 %
Volume change from comparative period (2)% (1)% (7)%
Volume change, excluding divestitures (2)% — % 1 %
Equity losses $ (64) $ (92) $ (31)
EBITDA $ 1,436 $ 1,036 $ 1,748
Certain items impacting EBITDA $ (23) $ (590) $ (119)
2013 Versus 2012
Performance Materials sales were $13,415 million in 2013, down 2 percent from $13,608 million in 2012. Compared with
2012, price was flat as increases across most businesses in North America and Europe were offset by decreases in Latin
America and Asia Pacific. Improved economic conditions drove price gains in Oxygenated Solvents in all geographic areas
except Asia Pacific, where price declined due to the unfavorable impact of currency. Price increases were also reported by Dow
Automotive Systems, Dow Formulated Systems and Polyglycols, Surfactants & Fluids due to higher propylene and energy
costs. These increases were offset by price declines in Amines, Dow Plastics Additives and most notably in Chlorinated
Organics, where aggressive competitors, coupled with global industry oversupply, lowered prices. Volume for 2013 was down
2 percent compared with 2012 as modest growth in Latin America was more than offset by declines in all other geographic
areas. Epoxy reported lower volume across all geographic areas, except Latin America, due to poor supply and demand
fundamentals. Volume declined in Amines and Oxygenated Solvents due to the expiration of a low margin marketing
agreement. Lower volume was reported by Chlorinated Organics and Dow Plastics Additives which were impacted by soft
demand conditions. Dow Automotive Systems reported volume gains due to stronger demand in the North American
transportation sector. Stronger consumer and industrial demand, as well as increased demand in the wind energy sector, drove
volume growth in Dow Formulated Systems. Volume gains were reported in PO/PG, especially in Asia Pacific where additional