Dow Chemical 2012 Annual Report Download - page 20

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Dow’s feedstock strength is unrivaled in the industry. Our tremendous scale, integration and
feedstock exibility differentiate us from our competitors and create a cost-advantaged
foundation for Dow’s technology-rich, higher-margin downstream businesses. Major growth
projects underway on the U.S. Gulf Coast and in the Middle East will deepen our advantage
and enable Dow to capture long-term, protable growth.

Feock vage
Building a Sustainable Competitive Advantage
Today, 70 percent of the Company’s global ethylene assets
are in regions with cost-advantaged feedstocks, helping
drive bottom-line results. In North America, for example,
disruptive shale dynamics are fueling significant cost
advantages and positioning the Company to capture
higher margins in our downstream performance
businesses – even while the industry is at mid-cycle
operating rates. In addition, Dow’s industry-leading
feedstock flexibility provides an additional advantage,
allowing us to use different feedstocks in response to
changes in price conditions.
82%
84%
86%
88%
90%
92%
94%
2008 2009 2010 2011 2012 2013 2014 2015 2016
PRICING POWER
96%
Sensitivity Factors
• GDP growth
• Demand multiplier
• Industry capacity
Industry Operating Rates
p




#1

Our recent investments on the U.S. Gulf Coast and in
the Middle East will only enhance our overall feedstock
advantage. Within the next five years, nearly 80 percent
of our internal ethylene production will feed our
performance businesses, helping to enable sustainable,
profitable growth. For example, in Performance Plastics,
advantaged feedstocks from the U.S. Gulf Coast are
expected to contribute approximately $1 billion in
additional annual EBITDA by 2017.
18 