Dow Chemical 2013 Annual Report Download - page 64

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industrial coatings. Despite market share gains achieved through technology innovations in paper coatings and in traffic paint,
notably EVOQUE™, volume for architectural coatings declined slightly, driven by continued weak end-use market conditions,
especially for residential construction in EMEA. Dow Water and Process Solutions volume was flat as higher demand for
reverse osmosis membranes used in water desalination projects and for ion exchange resins used in ultrapure water applications
was offset by weaker demand for ion exchange resins used in large industrial water projects. Dow Building and Construction
volume declined due to price/volume optimization in North America and slower construction activity in EMEA, which more
than offset volume gains in Asia Pacific. Performance Monomers volume increased in all geographic areas, especially in Asia
Pacific, driven by favorable supply/demand conditions in Japan due to a competitor plant outage.
EBITDA for 2012 was $823 million, down from $1,167 million in 2011. Compared with 2011, lower selling prices and lower
equity earnings from Dow Corning more than offset higher sales volumes, lower feedstock and energy costs and the favorable
impact of currency on costs. EBITDA for 2012 was negatively impacted by $134 million of certain items, as previously
discussed. EBITDA was negatively impacted in 2011 by a $60 million charge for a warranty accrual adjustment related to an
exited business.
Coatings and Infrastructure Solutions Outlook for 2014
Coatings and Infrastructure Solutions sales are expected to grow modestly in 2014. Dow Coating Materials sales are expected
to increase driven by higher demand for architectural coatings due to continued recovery in the housing industry, especially in
developed geographies. Increased demand is also expected for industrial coatings, driven by global economic conditions. Dow
Building and Construction sales are also expected to increase, primarily driven by higher demand for insulation products in
North America due to continued recovery of residential construction and continued improvement in non-residential
construction activity. Dow Water and Process Solutions sales are expected to increase slightly due to higher demand for reverse
osmosis membranes used in water desalination projects and ion exchange resins used in ultrapure water applications.
Performance Monomers sales are expected to increase due to improved end-market conditions and increased demand from
emerging geographies.
AGRICULTURAL SCIENCES
The Agricultural Sciences segment is a global leader in providing crop protection and plant biotechnology products, urban pest
management solutions and healthy oils. The business invents, develops, manufactures and markets products for use in
agriculture, industrial and commercial pest management, and food service. Agricultural Sciences consists of two businesses -
Crop Protection and Seeds, Traits and Oils.
Agricultural Sciences
In millions 2013 2012 2011
Sales $ 7,137 $ 6,382 $ 5,655
Price change from comparative period 1% 3% 5%
Volume change from comparative period 11% 10% 11%
Equity earnings $ 6 $ 1 $ 4
EBITDA $ 969 $ 977 $ 913
2013 Versus 2012
Agricultural Sciences sales were $7,137 million in 2013, up 12 percent from $6,382 million in 2012, a record for the segment
and both businesses. Sales gains were driven by the introduction and ramp up of new products and technologies. Compared
with last year, volume increased 11 percent and price increased 1 percent. Latin America reported 21 percent sales growth and
North America sales increased 13 percent. Crop Protection sales were up 10 percent compared with 2012, driven by new
product sales which increased 14 percent, while strong sales growth was also reported for the spinosyns and the corn and cereal
herbicide portfolios. Seeds, Traits and Oils sales increased 19 percent compared with 2012 with strong growth across most
major crop portfolios. SmartStax® corn hybrids posted record sales growth driven by the ramp up of POWERCORE™ Insect
Trait Technology in Latin America and REFUGE ADVANCED® in North America.
EBITDA for 2013 was $969 million, compared with $977 in 2012. EBITDA declined slightly primarily due to higher operating
expenses and increased spending on growth investments which offset strong sales growth in the Americas led by favorable
global agricultural and food industry conditions, new product sales and new seed technologies.