Dow Chemical 2015 Annual Report Download - page 23

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and the entire value chain. Together, these three global businesses have complimentary market reach, asset capabilities and
technology platforms that provide the Company with immediate and long-term growth synergies. Market growth is expected to
be driven by major shifts in population demographics, improving socioeconomic status in emerging geographies, consumer and
brand owner demand for increased consumer convenience, efforts to reduce food waste, growth in telecommunications
networks, specifically broadband and LTE networks, and global development of electrical transmission and distribution
infrastructure and renewable energy applications. Market segments served by these businesses include adhesives, construction,
food and specialty packaging, footwear, industrial and consumer packaging, hygiene and medical, infrastructure, pipe,
telecommunications and transportation.
The Energy business is one of the world’s largest industrial energy producers. This business produces or procures the energy
used by Dow, sells energy to customers located on Dow manufacturing sites and also engages in opportunistic merchant sales
driven by market conditions. Because of its unparalleled scale, purchasing power and global reach, the Energy business offers
Dow tremendous knowledge of world energy markets and the agility to respond to sudden changes in conditions.
The Hydrocarbons business is one of the largest global producers of ethylene, an internal feedstock that is consumed primarily
within Performance Plastics. The Hydrocarbons business is also a large purchaser and producer of propylene. The Company
strategically locates its polyethylene production facilities near its ethylene production facilities to optimize integration benefits
and drive low costs. Dow's global scale, operational discipline and feedstock flexibility create a cost-advantaged foundation for
the Company's downstream, market-driven businesses. In North America, shale gas opportunities - and the resulting increased
supplies of natural gas and natural gas liquids (“NGLs”) - remain a key, cost-competitive position for the Company's ethane-
and propane-based production. The Company's U.S. and European ethylene production facilities allow Dow to use different
feedstocks in response to price conditions. Meanwhile, the Company's U.S. Gulf Coast investments will strengthen ethylene
and propylene integration and establish a platform for growth of Dow's downstream businesses.
Products
Major applications/market segments and products are listed below by business:
Business Applications/Market Segments Major Products
Dow Elastomers Adhesives, footwear, housewares,
infrastructure, sports recreation, toys and
infant products, transportation
Elastomers, polyolefin plastomers, ethylene
propylene diene monomer elastomers ("EPDMs")
Dow Electrical and
Telecommunications
Building and construction, electrical
transmission and distribution infrastructure,
telecommunications infrastructure
Wire and cable insulation, semiconductive and
jacketing compound solutions, bio-based plasticizers
Dow Packaging and
Specialty Plastics
Adhesives, food and specialty packaging,
hygiene and medical, industrial and
consumer packaging, photovoltaic
Acrylics, polyethylene, low-density polyethylene,
linear low-density polyethylene, high-density
polyethylene, polyolefin emulsions, polyolefin
plastomers
Energy Principally for use in Dow’s global
operations
Power, steam and other utilities
Hydrocarbons Purchaser of feedstocks; production of cost
competitive monomers utilized by Dow’s
derivative businesses
Ethylene, propylene, benzene, butadiene, octene,
aromatics co-products, crude C4
Advantaged feedstock positions in the United States,
Canada, Argentina and the Middle East
Competition
Competition for the Performance Plastics segment includes chemical divisions of major national and international oil
companies, which provide competition in the United States and abroad. Dow competes worldwide on the basis of product
quality, product supply, technology, price and customer service. Performance Plastics will continue to benefit from an
advantaged feedstock position, including favorable shale gas dynamics in the United States, which will further strengthen the
Company's low-cost position and enhance global cost competitiveness. Key competitors include Borealis, ExxonMobil,
INEOS, LyondellBasell, Mitsui and SABIC.
Joint Ventures
Joint ventures play an integral role within the Performance Plastics segment by dampening earnings cyclicality and improving
earnings growth. Principal joint ventures impacting Performance Plastics are noted in the following section.