Dow Chemical 2009 Annual Report Download - page 72

Table of Contents
Electronic and Specialty Materials Outlook for 2010
Electronic and Specialty Materials sales are expected to increase in 2010, driven by continued recovery in the electronics, construction, water and health care
industries and by continued growth in emerging economies.
Electronic Materials sales volume is expected to increase driven by higher demand for consumer electronics.
Specialty Materials sales are expected to increase, driven by higher demand for cellulosics used in the construction industry and for METHOCEL™
cellulose ethers used in pharmaceutical applications. Increased demand for reverse osmosis membranes for water desalination projects and industrial
applications is expected to drive higher sales for Dow Water and Process Solutions. Sales of biocides and the specialty chemical products of ANGUS
Chemical Company are also expected to increase versus 2009.
COATINGS AND INFRASTRUCTURE
2009 Versus 2008 (Pro Forma Comparison)
Coatings and Infrastructure sales were $4,788 million for 2009, down 23 percent from $6,219 million in 2008, as volume dropped 16 percent and prices
dropped 7 percent. EBITDA for 2009 was $467 million compared with $654 million for 2008. EBITDA for 2009 was reduced by $172 million of
restructuring charges and by an $82 million increase in cost of sales related to the fair valuation of Rohm and Haas inventories. As a result of these charges
and the decrease in sales, EBITDA declined in 2009 despite lower raw material and freight costs and lower SG&A expenses. EBITDA for 2008 included
$39 million of restructuring charges. See Note C to the Consolidated Financial Statements for additional information on restructuring charges.
Adhesives and Functional Polymers sales for 2009 were down 16 percent versus 2008, as volume decreased 9 percent and prices decreased 7 percent.
Volume declined in all geographic areas due to lower demand for packaging, adhesive tapes and paper labels. Prices were lower in all geographic areas as well.
EBITDA for 2009 was negatively impacted by a $23 million increase in cost of sales related to the fair valuation of Rohm and Haas inventories and a
restructuring charge of $1 million. Despite these charges and a decline in sales, EBITDA for 2009 was slightly higher versus 2008 primarily due to lower raw
material costs and SG&A expenses. EBITDA for 2008 included a restructuring charge of $9 million.
Dow Building and Construction sales for 2009 were down 21 percent versus 2008, as volume decreased 17 percent and prices decreased 4 percent, with
half of the decline due to the unfavorable impact of currency. The decrease in volume was broad-based, with declines in all geographic areas, principally due
to a lower demand for materials used in residential and commercial construction. EBITDA in 2009 was reduced by $24 million of restructuring charges and a
$12 million increase in cost of sales related to the fair valuation of Rohm and Haas inventories. As a result of these charges, the decline in sales and increased
expenses related to a regulatory-required changeover in foaming agent in North America, EBITDA for 2009 declined despite the benefit of lower raw material
costs. EBITDA for 2008 included a restructuring charge of $13 million.
Dow Coating Materials sales were down 26 percent from 2008, as volume decreased 18 percent and prices decreased 8 percent. The decrease in volume
was due to weak demand for architectural and industrial coatings. Demand for coatings was down significantly due to the downturn in the housing industry,
particularly in North America and Europe. EBITDA in 2009 was reduced significantly by $147 million of restructuring charges, primarily due to impairment
on the specialty latex
42