Dow Chemical 2014 Annual Report Download - page 5
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2014 Annual Report 3
Accelerating Competitive Advantage
We are leveraging the power of our integrated value
chains to deliver solid returns while capturing the
advantage from our investments and our leadership
in the markets in which we participate to drive
greater value in 2015 and beyond, as our cash
and growth engines simultaneously ramp up:
• Industry-leading market positions provide substantial
competitive advantages, and significant technology investments
extend our growth. Dow is innovating with customers, leveraging our
industry-leading science and technology expertise to deliver solutions
aligned to attractive end-markets. We are growing where there is growth
in key end-use markets like packaging, automotive, electronics and
agriculture. And we are deselecting peripheral slow-growth markets.
Additionally, and critically for this value-growth strategy, in 2014, our
scientists achieved a record number of patents. Sales from patent-
advantaged products today represent more than 20 percent of Dow’s
revenue — enabling future margin expansion opportunities. We expect
to achieve similar results moving forward as we further accelerate the
time to commercialization of high-margin technologies.
• Significant new asset investments in advantaged feedstocks and
key products to enable us to stay low-cost wherever we operate
remain on schedule and are poised to deliver significant EBITDA
contribution. We maintained a steady trajectory of construction progress
in 2014 and expect to bring key elements of our investment program
online this year. An example includes our Sadara joint venture with Saudi
Aramco. The polyethylene units in this landmark project are expected to
come online in 2015. On the U.S. Gulf Coast, our propane dehydrogenation
(PDH) unit — anticipated to come on stream in the second half — will
capture the propane-to-propylene spread for one-third of Dow’s U.S.
propylene needs. The Company’s world-scale ethylene facility also remains
on track for its planned 2017 start-up.
• Accelerating portfolio management actions. In 2014, Dow focused
capital to our core and growing businesses. Consistent with this focus,
we drove our divestiture target even higher, increasing the range to
$7 billion to $8.5 billion in proceeds by mid-2016. Actions in the year
resulted in $2 billion in proceeds from signed and completed transactions.
As I mentioned, the carve-out of a significant portion of our chlorine value