The Dow Chemical Company

Post-2020 Global Chemicals Supply Chains What will be the drivers for market supply and demand and will chemicals product safety emerge as a winner or loser?

Rafael CayuelaCorporate & Strategy Development

Author, Director, Chief Economist

© 2017 The Dow Chemical Company All rights reserved. This communication is DOW CONFIDENTIAL

The content of this communication is intended for Dow internal use only. Any other dissemination is a violation of Dow Policy

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Caution: “A World Poised for Disruption”

2

No thanks!We are TOO busy

4th Industrial Revolution“Sustainable, Digital, Citizens”

Innovations are usually not quickly understood and accepted…Dual Horizons Needed!

2017 – 2018Slow Growth Environment

September 2016DOW CONFIDENTIAL - Do not share without permission 120th Young Anniversary

Sustainable Revolution* Bioeconomy * Biomimicry* Circular Economy Future of NanoDesign

Robots, AI, IOT, Big Data Additive Manufacturing*

Plastics from C02 * & Algae The Future of Work? *Future of AutomotiveCitizens Revolution

Future of Laboratories *

Future of Agriculture

Digital Revolution*

Dis

rup

tio

n1

Dis

rup

tio

n 2

Dis

rup

tio

n 3

3D Printing : Plastic / Metals*

Exciting Times : Multiples Disruptions

DOW CONFIDENTIAL - Do not share without permission 120th Young Anniversary

Exponential Innovation

1850 1900 1950 2000 2050 2100

Innovation

2nd & 3rd INDUSTRIAL REVOLUTIONFossil Fuel, Computer and Internet Based

1,2 1,7 2,5 6.0 9,2 12 Billion people

Chemical Industry R&D btw. 2010-15 • 25% new chemistry• 75% in incremental innovationSource: McKinsey

1,000 Grams CO2 Capita /Day

4,000 Grams CO2 Capita/Day

6,000 Grams CO2 Capita/Day

12,000 Grams CO2 Capita/Day

4th INDUSTRIAL REVOLUTION“The Sustainable, Digital, Citizens One”

Tech. ConvergenceCollaboration

13,000 Grams CO2 Capita/Day

4,000 Grams CO2 Capita/Day

1,000 Grams CO2 Capita/Day

Operational Efficiency

2100

IOT, AI, 4D, Big Data Blockchain, AR, Drones Robots, Quantum, AI,

2025

Innovation Drivers for Chemical Industry

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1900 1950 2000 2050

Chemical Molecules

Applications

Technological Convergence

Science Intersections

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“13th Five-Year Plan - FYP” China Petroleum and Chemical Industry

Objective: From a big country of Petroleum and Chemical Industry (world largest) to a great “power”. From “following the lead” to “taking the lead”

Industry - Handling / Upgrading Overcapacity

1) Subtraction” & “Enhancement” – M&A2) Rapid Technological Upgrade - Sustainability3) Develop Strategic on Emerging Industries

3.1 R&D on New Materials 3.2 New Energy / Feedstock

a) New Shale gas Industryb) New Biomass Industryc) Modern coal chemical industry d) Energy Savings & Environment Protectione) Producer Services – Industrial Parks

4) Implementation “One Road - One Belt Strategy”

Source : CPCIF China

Source : Corporate Strategy, CEFIC, ACC, McKinsey

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Chemical Ind. Playground : China

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Innovation and Integration

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Dow 2025 Sustainability Goals

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Innovation - High-throughput Experimentation

• 2 million experiments a year

• Most powerful innovation engine

• 754 U.S. patent grants

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Historic Merger

Agriculture Co.

Specialty

Products Co.

*T he post-merger Materials Science Company is expected to be the first spin-off, assuming such sequencing would allow for the completion of all intended spin-offs within 18 months of merger closing and would not adversely impact the value of the intended spin -offs.

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The New Dow – Integration!

Ethylene

Propylene

High-Throughput

Research

Polymer Science

Material Science

Formulation

Sciences

Process Engineering

NARROWER, DEEPEREND-MARKET PRESENCE

ADVANTAGED BACK-INTEGRATION

WORLD-CLASS SCIENCE ANDENGINEERING CAPABILITIES

Platform

sHigh-Performance

Computer Modeling

Packaging

Transportation

Consumer Care

Infrastructure

Solu

tion

s

Bu

ild

ing B

locks

Catalyst Discovery

& Ligand Synthesis

Application Development

Silicones

Excludes Electronic Materials, Agricultural Sciences, and Includes Dow Corning Silicones

INNOVATION & INTEGRATION

~ 90% of

Revenue

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Silicones

Ethylene plant

construction is

complete

Dow’s long-term commitment to making products for world markets

Louisiana

expansion

US Gulf Coast

Powerful Growth Drivers

Plastics franchisehas been

commercialized

26 integrated

world-scale

manufacturing

plants

Remaining units are schedule to

start-up throughout 2017

18 units in

operating or

startup

mode

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Next Phase of Growth Investments

• Make a series of investments in our

polyurethanes franchise

• Expand our new Texas-9 cracker

– world’s largest ethylene facility

• Construct world-scale polyethylene units –USGC and Western Europe

Double Dow’s growth investments to more $12 billion over a 10-year period

• Embark on $400-million

transformation of Midland-based manufacturing operations

• Building a new world-class

Innovation Center in Michigan – a $100-million hub for global R&D

• Build new catalyst production unit to enhance Univation licensing model

• Unleash an additional 350,000 metric

tons of polyethylene from our existing asset network

INNOVATION & INTEGRATION

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Thanks for your attention!

© 2017 The Dow Chemical Company All rights reserved. This communication is DOW CONFIDENTIAL

The content of this communication is intended for Dow internal use only. Any other dissemination is a violation of Dow Policy

DOW CONFIDENTIAL - Do not share without permission

120th Young Anniversary

120th Young Anniversary