Dow Chemical 2014 Annual Report Download - page 39
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15
RAW MATERIALS
The Company operates in an integrated manufacturing environment. Basic raw materials are processed through many stages to
produce a number of products that are sold as finished goods at various points in those processes. The two major raw material
streams that feed the integrated production of the Company’s finished goods are chlorine-based and hydrocarbon-based raw
materials.
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,
primarily to generate electricity, and purchases electric power to supplement internal generation. Expenditures for hydrocarbon
feedstocks and energy accounted for 38 percent of the Company’s production costs and operating expenses for the year ended
December 31, 2014. The Company purchases these raw materials on both short- and long-term contracts.
The Company had adequate supplies of raw materials during 2014, and expects to continue to have adequate supplies of raw
materials in 2015. Significant raw materials, by operating segment, are listed below:
Significant Raw Materials Performance
Materials &
ChemicalsRaw Material
Agricultural
Sciences
Consumer
Solutions
Infrastructure
Solutions
Performance
Plastics
Acrylonitrile x x x
Ammonia x x x
Aniline x
Benzene x x
Butadiene x x
Butanol (1) x
Butene x x
Carbon Black x x x
Carbon Monoxide x x
Chlorine (2) xxxx
Condensate x
Cumene x
Electric Power x x
Ethane x
Ethanol x x x x x
Ethylene (1) xxx
Formaldehyde x x x
Hexene x
Hydrogen Peroxide (3) x
Liquified Petroleum Gases x
Methanol x x x x
Naphtha x
Natural Brine x
Natural Gas x
Octene x
Phenol x
Polystyrene x x
Propane x x
Propylene (1) xxxx
Pygas x
Salt x
Styrene x x x
Wood Pulp x
(1) Produced by the Company and procured from external sources for internal consumption.
(2) Produced by the Company for internal consumption.
(3) Primarily produced and procured by a consolidated variable interest entity.