Dow Chemical 2010 Annual Report Download - page 19

17
Innovating for Growth
Dow’s R&D pipeline is deep and diverse. We have more than
500 projects in our pipeline that together represent a non-risk-
adjusted net present value (NPV) of $30 billion, or $12 billion
on a risk-adjusted basis.
The health of this pipeline is evident with more than $16 billion
in non-risk-adjusted NPV in early-stage exploration and
$6 billion in projects approaching commercialization. Our
rigorous prioritization continues to ensure that we support
opportunities to investigate a wide variety of disruptive
innovative technologies, while continuing to deliver
near-term, bottom-line results.
STRATEGY-IN-ACTION
Technology Integration: A Powerful
Path to Innovation
By using our scope and scale to connect our materials
science expertise to customer needs, we are using
a single epoxy molecule to create formulations for a
product as small as a 35 nm chip and as large as a
60-meter wind blade. This new epoxy formulation
combines excellent thermal characteristics and strong
bonding capabilities with flow properties that make it
an ideal underfill for “flip chips” – a chip packaging
technique that is favored in smart phones and other
lightweight electronic devices.
But that is not all. This epoxy has properties that give it
a fast infusion rate and make it perfect for the efficient
manufacture of wind turbine blades. Two demanding
industries. Two critical market needs. One promising
material used to create high-margin, revolutionary
customer solutions. This is the power of technology
integration. This is the power of one Dow.
Among our achievements in 2010:
•฀฀Our฀breakthrough฀DOW™฀POWERHOUSE™฀Solar฀Shingle฀
passed more than 50 third-party tests to achieve UL
certification, a critical milestone for 2011 commercialization.
•฀฀SmartStax™ trait technology, developed under an R&D and
cross-licensing agreement between Dow AgroSciences and
Monsanto, was commercially launched in North America.
•฀฀Dow฀AgroSciences฀was฀granted฀patents฀in฀key฀countries฀for฀Dow฀
Herbicide Tolerant Trait Technology in corn. When launched, the
new technology system will enable exceptional weed control by
partnering with and improving current cropping systems to offer
growers unsurpassed flexibility, convenience and value.
•฀฀Our฀16-inch฀membrane฀reverse฀osmosis฀water฀filters฀were฀
chosen to be used in the world’s largest desalination plant
in Israel. These new filters are twice the size of previous units,
helping to make the production of clean drinking water from
seawater more affordable and energy efficient.
R&D Pipeline Valuation
NPV ($ in billions)
5
10
17
28 30
1997 2007 2008 2009 2010
Preservative
Advanced Materials Division
Performance Division
Dow AgroSciences
Corporate and New Businesses
Basics
2010 Annual Report
•฀฀Our฀portfolio฀of฀low-VOC/low-odor฀binders฀continues฀to฀gain฀
wide acceptance by paint manufacturers worldwide. Led by the
suite of acrylic-based AVANSE™ binders, the portfolio provides
tough, durable coatings that meet the most stringent VOC and
environmental standards.
•฀฀Dow฀Electronic฀Materials฀introduced฀new฀products฀in฀a฀variety฀
of areas – including polishing pads, slurries, photoresists,
metallization and films – helping to further our leadership
positions in the industry. In fact, more than 95 percent of
all smart phones are manufactured using products from
Dow Electronic Materials.
•฀฀Dow฀Coating฀Materials฀introduced฀a฀new฀technology฀platform฀
that takes hiding capability to a new level by significantly
reducing customers’ dependence on titanium dioxide.
•฀฀Dow฀Oil฀&฀Gas฀launched฀ELEVATE™฀CO2 Enhanced Oil Recovery
Conformance Solution, an innovative, new technique designed
to increase oil production at existing wells while simultaneously
reducing operating expenditures.
2010 Pipeline Valuation by Stage
($ in billions)
Exploration
16.3
2.5
Development
6.4
3.7
Implementation
6.9 5.8
NPV
Risk-Adjusted NPV