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15
Salt, natural brine and electricity are the base raw materials used in the production of chlor-alkali products and derivatives.
The Company owns salt deposits in Louisiana and Texas; Alberta, Canada; Brazil; and Germany. The Company also produces a
portion of its electricity needs in Louisiana and Texas; Alberta, Canada; and Germany.
The Company purchases hydrocarbon raw materials including ethane, propane, butane, naphtha and condensate as
feedstocks. These raw materials are used in the production of both saleable products and energy. The Company also purchases
certain monomers, primarily ethylene and propylene to supplement internal production. The Company purchases natural gas,
mainly to generate electricity, and purchases electric power to supplement internal generation. Expenditures for hydrocarbon
feedstocks and energy accounted for 37 percent of the Company’s production costs and operating expenses for the year ended
December 31, 2012. The Company purchases these raw materials on both short- and long-term contracts.
Significant raw materials, by operating segment, are listed below:
Significant Raw Materials
Raw Material
Electronic and
Functional
Materials
Coatings and
Infrastructure
Solutions
Agricultural
Sciences
Performance
Materials
Performance
Plastics
Feedstocks
and Energy
Acetone x x
Ammonia x x
Aniline x
Benzene x x x
Bisphenol A x
Butadiene x
Butane x
Butene x
Cumene x
Chlorine (1) x x x x
Condensate x
Electric Power x
Ethane x
Ethylene (2) xxx
Hexene x
Hydrogen Peroxide x
Liquified Petroleum
Gases x
Methanol x x
Naphtha x
Natural Brine x
Natural Gas x
Octene xx
Phenol x
Propane x x
Propylene (2) xx x x
Salt x
Styrene x x
Toluene Diamine x
(1) Produced by the Company for internal consumption.
(2) Produced by the Company and procured from external sources for internal consumption.
The Company had adequate supplies of raw materials during 2012, and expects to continue to have adequate supplies of
raw materials in 2013.
RESEARCH AND DEVELOPMENT
The Company is engaged in a continuous program of basic and applied research to develop new products and processes, to
improve and refine existing products and processes, and to develop new applications for existing products. Research and
development expenses were $1,708 million in 2012, $1,646 million in 2011 and $1,660 million in 2010. At December 31, 2012,
the Company employed approximately 6,800 people in various research and development activities.