Dow Inc. · NYSE:DOW
Dow — The Dow Chemical Company — Merger or Acquisition (July 2011)
21 slides from Dow's merger presentation, Jul 25, 2011
Slide 1: Dow & Saudi Aramco Embark on World's Largest Chemicals Project
The Dow Chemical Company Dow & Saudi Aramco Embark on World’s Largest Chemicals Project to Drive Downstream Growth J l 25 July 25, 2011
Slide 2: SEC Disclosure Rules
SEC Disclosure Rules Some of our comments today may include statements about our expectations p for the future. Those expectations p involve risks and uncertainties. Dow cannot guarantee the accuracy of any forecasts or estimates, and we do not plan to update any forward-looking statements if our ex
Slide 3: Agenda
Agenda Forging a Premier Partnership for Growth Strategic Intent & Project Overview Project Economics & Milestones Driving Growth on Multiple Fronts 3
Slide 4: Historic Partnership Drives Next Generation of Growth
Historic Partnership Drives Next Generation of Growth Commencing a New Era of Growth Premier partnership focused on long-term growth World-scale operations supported byy strong g back-integration g to advantaged feedstocks Tailored product mix designed to target high-growth, high- margin end-m
Slide 5: Introducing Sadara
Introducing Sadara صدارة Sadara Progressive leadership, enhanced performance, and a status derived from quantifiable talent and proven mastery. 5
Slide 6: Sadara Delivers Value on Every Front
Sadara Delivers Value on Every Front State-of-the-art, world-scale chemicals complex and value park – Construction to begin immediately; production to ramp up beginning in 2015 – Reaching $10 B in annual revenue – More than 3 MM metric tons of capacity Positioned to capture growth opportunities
Slide 7: Sadara Creates Value on Every Front
Sadara Creates Value on Every Front Delivers value-add to Builds new industries and fast-growing value chains that creates jobs for Saudi Arabia hold tremendous market opportunities JV Brings state-of-the-art Adds capacity needed to technology and competitive supply emerging regions, cost position t
Slide 8: Uniquely Positioned to Capture Emerging Region Growth
Uniquely Positioned to Capture Emerging Region Growth Expected Regional Volume Split Asia Pacific: ~45% Middle East: ~25% Europe: ~20% Other: ~10% 10% Advantaged g feedstocks enable g growth capture p in attractive value chains 8
Slide 9: Positioned to Address High-Growth Sectors in Asia Pacific
Positioned to Address High‐Growth Sectors in Asia Pacific Automotive Home & Electronics Water Packaging Personal Care China’s 2005‐2020 CAGR % 12‐15% 7‐9% 12‐15% 12‐15% 10‐15% S Source: Dow D Sadara uniquely positioned to capture significant growth in Asia Pacific Asia Pacific’s global demand sh
Slide 10: Target End-Markets Drive Performance-Focused Design
Target End‐Markets Drive Performance‐Focused Design Hygiene and Medical Food Packaging Specialty Packaging Adhesives Feedstocks Electronics Ethane High-Growth Coatings End-Markets Sadara & Value Liquid Feeds Automotive Chains Oil & Gas Refinery Integration Consumer Durables Construction Infrastructu
Slide 11: Polyethylene Packaging Growth Centered on Emerging Regions
Packaging Growth Centered on Emerging Regions 40 LLPDE Growth Rates 2011-2015 2016-2025 person) North America U.S. & Canada 4% 3% China 12% 8% Demand per Capita (kg per p Western Europe 4% 2% 30 Asia Pacific ex-China 10% 7% n Europe Middle East & Africa 8% 6% Latin America 8% 6% Western Eastern Euro
Slide 12: Polyurethanes Share Growth Enabled By Investments
Polyurethanes Share Growth Enabled By Investments Dow participates in key fast- Estimated % of Polyurethanes growing applications Industry 2010 Sales(1) Middle East & Africa Asia Pacific – Automotive – Appliances – Construction 7% – Furniture and bedding – Wind energy 8% JV investment enables sh
Slide 13: Agenda
Agenda Forging a Premier Partnership for Growth Strategic Intent & Project Overview Project Economics & Milestones Driving Growth on Multiple Fronts 13
Slide 14: Performance-Focused Product Slate
Performance‐Focused Product Slate Amines Glycol Ethers Propylene Glycol Feedstocks Polyether Polyols Ethane Isocyanates Sadara Liquid Feeds Solution PE Refinery Integration LDPE Elastomers Water Others… 14
Slide 15: Highly Competitive and Profitable Investment
Highly Competitive and Profitable Investment $10 50% Revenue A Margin EBITDA Margin Range e ($ B) $8 Annual JV Revenue d JV EBITDA $6 ~40% margin 40% on average $4 Projected $2 $ $0 30% 2015 2020 2025 Dow expects to reach cash flow break-even within 5 years of start-up Sadara revenues projected
Slide 16: Equity-Light Financing Plan Reduces Project Risk
Equity‐Light Financing Plan Reduces Project Risk Target Equity Funding: 35% Target Debt Funding: 65% IPO Sadara Aramco Total Project Debt Investment Dow ~$20 B 16
Slide 17: Key Milestones Going Forward
Key Milestones Going Forward Remaining plants ramp to full production Final investment Financial close decision 2H 2011 2012 2013 2014 2015 2016 2017 Sadara S d formation f ti & IPO Firstt plants Fi l t come online li construction begins (cracker and PE) 17
Slide 18: Agenda
Agenda Forging A Premier Partnership for Growth Strategic Intent & Project Overview Project Economics & Milestones Driving Growth on Multiple Fronts 18
Slide 19: Future Value Park Accelerates Growth in Key Value Chains
Future Value Park Accelerates Growth in Key Value Chains Announced Today Water Thermoplastic p Polyolefins y ((TPE)) Compounding Wire & Cable Compounding Specialty Packaging Consideration Value Sadara Park Photovoltaic Encapsulant Films Gas Treatment Formulations Under C Composite Carbon Fiber Therm
Slide 20: Advancing Our Strategy On All Fronts
Advancing Our Strategy On All Fronts Geographic Position Innovation Pipeline Integrated g Portfolio By 2012, 35% of revenue to come from emerging geographies g g p R&D playbook contains Record sales in emerging >500 projects, with risk geographies ($16B) in adjusted NPV of $12B 2010 70% of D
Slide 21: <> The Rt Formula aur
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