Dow Chemical 2009 Annual Report Download - page 7

2009 Annual Report 5
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THE RIGHT FOCUS
Our reinvigorated innovation engine is focused
on four global emerging social and economic
megatrends: Energy, Transportation and
Infrastructure, Consumerism, and Health and
Nutrition. By aligning our innovation efforts
and business investments with these global
megatrends, we ensure our growth resources
are aimed at the areas of greatest societal
need and business opportunity. Already, we
are delivering practical solutions for some
of the world’s most critical challenges. To
advance renewable energy production, our
POWERHOUSE™ Solar Shingles promise to
put solar power within reach of mainstream
energy consumers by addressing two of the
biggest challenges associated with residential
solar – cost and aesthetics. And to help us
breathe easier, our AERIFY™ Diesel Particulate
Filters enable automotive manufacturers
to meet more stringent emissions regulations
while delivering outstanding engine
performance at lower overall costs. And
to help produce more food to feed a
growing planet, SmartStax™ corn hybrids
improve insect protection, allow the best
solution to be planted on more land and
minimize the potential for insect resistance.
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THE RIGHT GEOGRAPHIC
BALANCE
Few companies are more global than
Dow. Today, 68 percent of our revenues
come from locations outside of the United
States. This number is even higher when
considering that about 75 percent of the
sales of Dow’s joint ventures are also
outside the United States. Even more
impressive, 32 percent of Dow’s sales
came from emerging geographies, where
growth rates are in excess of 10 percent.
We’re seeing volume growth of two to
three times gross domestic product in
emerging geographies in places such as
Brazil, China, India, Eastern Europe and
Southeast Asia, where we already have
a substantial presence. By 2012, we
anticipate revenues from our emerging
geographies will comprise at 35 percent
of our total revenues.
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THE RIGHT INNOVATION
PIPELINE
Dow is reinventing itself into an agile
scientific innovator with the capability
to solve major global issues. Fueling
this transformation is our innovation
engine. In 2009, we invested a record
$1.6 billion1 in R&D – more than the
combined physical sciences R&D budgets
of the top 25 ranked U.S. universities.
Our continued investments are paying
off: during the last three years, we
have nearly tripled our pipeline valuation
– to $28 billion – by making targeted
investments in higher-value, higher-margin
products and businesses. At the same
time, we have implemented a rigorous,
cross-company system of portfolio
management to ensure every research
dollar is spent on the highest value-
adding opportunities. By consistently
investing in world-class resources and
people, our innovation engine sets the
stage for delivering long-term value to
our stockholders while addressing the
evolving needs of our planet.
1Pro forma basis.