Dow Chemical 2012 Annual Report Download - page 58
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32
Dow's global plant operating rate was 81 percent of capacity in 2012, compared with 80 percent in 2011 and 83 percent in
2010. Operating rates increased in 2012 with actions taken by management to rationalize capacity through shutdowns
contributing to the improvement. In 2011, operating rates decreased from 2010 due to planned turnarounds and as the Company
reduced production levels in the early part of the fourth quarter due to customer destocking.
Personnel count was 54,353 at December 31, 2012, up from 51,705 at December 31, 2011. Headcount increased from year-
end 2011 due to growth initiatives and the inclusion of 1,946 seasonal employees in the Agricultural Sciences operating
segment as part of the Company's personnel count. This increase was partially offset by decreases related to the 1Q12 and 4Q12
Restructuring programs, which are expected to be completed by December 31, 2014. Personnel count at December 31, 2011
increased from 49,505 at December 31, 2010 primarily due to the hiring of additional employees to support the Company's
growth initiatives.
Research and development (“R&D”) expenses were $1,708 million in 2012, compared with $1,646 million in 2011 and
$1,660 million in 2010. In 2012, R&D expenses increased 4 percent from 2011, driven largely by increased spending on
strategic growth initiatives in Agricultural Sciences. In 2011, R&D expenses were in line with the prior year as selected cost-
reduction initiatives offset Dow's continued investment in its technology pipeline, with the most notable investments made in
Agricultural Sciences, Electronic and Functional Materials, and Coatings and Infrastructure Solutions.
Selling, general and administrative (“SG&A”) expenses were $2,861 million in 2012, compared with $2,788 million in
2011 and $2,609 million in 2010. SG&A expenses increased 3 percent from 2011, primarily due to increases in Agricultural
Sciences due to growth initiatives. In addition, in 2012 SG&A was impacted by $21 million of implementation costs related to
the Company's restructuring programs. In 2011, SG&A expenses increased 7 percent from 2010, as selling expenses increased
in Electronic and Functional Materials and Agricultural Sciences to support new product launches and commercial activities.