dow chemical: a growth and sustainability journey in … ningke.pdf · dow chemical: a growth and...

Dow Chemical: A Growth and Sustainability Journey in China

Presentation at International Advanced Coal Technologies Conference Xian, 4 June 2012

North America Sales: $21.35bn

Latin America Sales: $7.25bn

Europe, Middle East & Africa Sales: $20.84bn

Asia Pacific Sales: $10.55bn 17.6% global sales

• 2nd largest chemical company in the world • Founded in 1897 by Herbert H. Dow in Midland, Michigan, U.S. • A science and technology leader with annual sales of $60 billion in 2011

• Supplies a broad range of products/services to customers in approximately 160 countries

• More than 5,000 products manufactured at 197 sites in 36 countries • Employs 52,000 employees worldwide • Greater China is Dow’s 2nd largest market: 2011 sales = US$ 4.4 billion

2

Dow Chemical’s Business Operating Segments Advanced Materials

Electronic & Functional Materials

Coatings & Infrastructure Solutions Dow Building & Construction

- Dow Building Solutions - Dow Construction Chemicals

- Dow Solar Solutions Dow Coating Materials

- Architectural Coatings - Industrial Coatings

Dow Water & Process Solutions Performance Monomers JV: Dow Corning

Polyethylene Plastics Licensing

& Catalyst Dow Packaging &

Converting Dow Elastomers Dow Electrical & Telecommunications

Chlor-Alkali/Chlor-Vinyl Energy Ethylene Oxide/Ethylene Glycol JV: EQUATE JV: MEGlobal

Hydrocarbons (Olefins, Aromatics, Aromatic Derivatives) JV: Compañia Mega JV: SCG-Dow JV: The Kuwait Olefins Company

K.S.C

JV: EQUATE JV: Equipolymers JV: The Kuwait Olefins Company K.S.C. JV: SCG-Dow JV: Univation Technologies

Amines Automotive Systems Chlorinated Organics Dow Formulated Systems Dow Oil & Gas Dow Plastics Additives

Performance Materials

Epoxy Oxygenated Solvents Polyurethanes Polyglycols, Surfactants and

Fluids Dow Haltermann SAFECHEM JV: BASF Dow HPPO B.V. JV: Saudi Acrylic Monomers

Company LLC (SAMCO) JV: SCG-Dow


Dow AgroSciences - Agricultural Chemicals - Seeds, Traits, & Oils

AgroFresh

Agricultural Sciences


Dow Electronic Materials - Semiconductor Tech - Interconnect Tech - Display Technologies - Growth Technologies

Functional Materials - Dow Wolff Cellulosics - Dow Home & Personal Care - Dow Microbial Control - Performance Additives

JV: Dow Corning

Performance Plastics


Feedstocks & Energy

Feedstocks & Energy Performance Plastics

3

Shanghai

Beijing

Guangzhou

Taipei

HK

Tianjin

5 Business Centers

18 Key Manufacturing Sites

Headquarters

BPSC Center


Feedstocks and Energy

Coatings andInfrastructure Solutions

Electronic andFunctional Materials



2011 Revenue Breakdown

Becoming Dow’s 2nd largest market Total assets $ 1.2 Bn 2011 sales $4.45 Bn, 7% of

Global, 19% YoY Growth* ~3600 employees, 7% of Global

Performance

Business 66%

Others <3%

Market Driven

Business 31%

* Excludes Styron

Dow’s Value-added Portfolio in China

Value-Added Business Portfolio 2011

>97% Performance

+ Market Driven !

Dow has achieved 16% compound annual growth in Greater China over the last decade

Polyol JV in Ningbo

1989 1998 2002 2004 2009

PU System House in Guangzhou

Zhangjiagang integrated site

Greater China Regional

Headquarters

Shanghai Dow Center ROH

Acquisition Glycol Ether

Plant

0.3 0.7 0.9 1.0

1.3 1.6

2.2 2.3 2.7

3.3 3.2 3.7

4.0 4.5

0.00.51.01.52.02.53.03.54.04.55.0

1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Ann

ual S

ales

(U

S$ b

illio

n)

2011

Univation Plant

EM / IT Plant

Dow Chemical’s China journey so far…

GDP growth: 7% annually (higher expected)

Income increasing > 7% annually Unemployment <5% Energy consumption reduction: 16%/GDP

unit CO2 Emission reduction: 17%/GDP Unit Alternative energy >11.7% (8% in 2010) Pollution reduction: 8%-10% from 2010

China 2015 Key Targets Pillars for 12th Five Year Plan

Restructuring The Economy

Promoting Social

Equality

Protecting the Environment

Inflation Control Increased Consumption Value-adding Industries

Urbanization Go West Northeast Area Revitalization

Fairness of welfare Energy efficiency Environment quality Alternative Energy

Sus

tain

able

G

row

th

Favorable Trend to

Stimulate domestic consumption, develop consumer electronics, home appliances, packaging, etc

Enhance environment protection, develop alternative energy & improve energy efficiency

Reduce provincial imbalances, electric vehicle leadership

Improve social welfare, farming efficiency, water conservation

Transportation &

Infrastructure

Health & Nutrition

Consumerism

Energy

Dow’s Transformational Strategy

Grow in Emerging Markets

Ride Global Mega Trends

Drive for Advantaged Business Mix

China is in transformation; so is Dow Chemical

http://en.wikipedia.org/wiki/Northeast_Area_Revitalization_Plan

2010

$ 3.7 Bn*

Dow Chemical’s 2015: Growth Enablers

Deeper customer partnerships X-Biz collaboration

Accelerate Existing Business Growth

NBD / Innovation

Increase Organizatio

nal Presence & Capability

Mid –Term Opportunities ESD Materials Photovoltaic Energy Efficiency

Sales Office Network Logistics & supply capability People Brand & reputation

Increased investment in local assets

Growth Project

Bolt-on M&A

Organic Business Growth

Thai Growth Projects

* Exclude Styron

3rd Party’s Capacity

Sadara Downstream

2015: $ 7 ~8 Bn

Taiwan Growth

Preferential Business

Investments

$ > 5 Bn

$ ~ 1 Bn

Collaboration with Customers

Increased Local Investment

Innovation around growth platforms

Maximizing our Taiwan presence

Enhanced Brand & Reputation

Expanded Market Reach

Investment in People

Dow Chemical’s 2015: Growth by 7 Dimensions

19 DOW CONFIDENTIAL – Do not share without permission

§ More effective access to emerging market and new customers § Enhancement of customer intimacy § Competitive cost

§ “Clusters” create critical mass

Sales office network expansion

N - GDP: 1722 CAGR : 10.4 % Population: 334 Cost Index: 84

N - GDP: 1137 CAGR: 11.3% Population : 305 Cost Index: 82

N - GDP: 1462 CAGR: 9.1% Population : 215 Cost Index: 100

Shanghai

Beijing

Guangzhou

Taiwan

HK

Qingdao

Tianjin

Chengdu / Chongqing

Dalian

Yulin

Dow coastal footprint

§ Traditional market location

§ Increasingly high cost & mkt remote

Dow Chemical’s 2015: Expanded Market Reach

§ Coastal Provinces today account for > 75% of total sales revenue in Mainland China

§ Costal Provinces account for 60% total GDP of Mainland China in 2010

Yulin Coal to Chemical Project

– World scale integrated Coal, Power and Chemical complex, manufacturing high value added downstream chemicals from coal

– Partnership with ShenHua Group, the largest coal company in China and the world

– Designed with the state of art coal to chemical technologies to achieve cleaner manufacturing, EHS excellence and business sustainability

– Demonstrated commitment to China’s Go-West Initiative, Energy Security and Feedstock Diversification Strategies

– Needs continuous strong support from the government

10

Yulin

Sustainability: A Commitment From the Beginning

HH Dow partners with Westinghouse to develop Co-Generation

1906 1935

First industrial use of bacteria to degrade phenolic waste

Developed water-based, acrylic technology that revolutionized the paint industry

1953

“War on BTUs” energy conservation program launched

1967

Waste Reduction Always Pays (WRAP) launched

1986

Corporate Environmental Advisory Council formed

1991 1996

Claude Fussler writes: Driving Eco Innovation

2005

2005 Goals saved company $5 billion on $1 billion Investment, 2015 Sustainability Goals Set

Frank Popoff pens Eco-Efficiency: The Business Link to Sustainable Development

Dow Signs UN Global Compact

2007 2010

Won 7th Presidential Green Chemistry award

2015

2005 Goals Set

1897 2000 2011

Collaboration announced with The Nature Conservancy

11

Sustainability: 2005 Goals set in 1996

In 1996 we publicly launched Dow’s 2005 EH&S Goals,* telling the world

we would reduce: – Injuries and illnesses per 200,000 work hours by 90 percent. – Leaks, breaks and spills by 90 percent. – Transportation incidents per 10,000 shipments by 90 percent. – Process incidents, including fires, explosions and significant

chemical releases, by 90 percent. – Motor vehicle incidents per one million miles by 50 percent. – Dow employee and contractor fatalities – Repeat incidents with Dow product at customer facilities by 50

percent (from 2001 levels) – Etc.

* From 1994 baseline 12

Sustainability: What We Achieved by 2005

As a result of the 2005 Goals we have:

Saved more than $5 billion with a $1 billion investment

Reduced solid waste by 1.6 billion pounds

+

Reduced water use by 183 billion pounds

+

Saved 900 trillion BTUs of energy

=

Reduced personal safety and health incidents by 84%

+

Reduced chemical emissions by 56% while production increased 31%

Working at Dow is 20x safer than working at a grocery store! 13

Double the percentage of sales to 10% for products which are advantaged by sustainable chemistry

Achieve at least three breakthroughs that will significantly help solve world challenges

Publish product safety assessments for all products

Achieve on average a 75% improvement of key indicators for EH&S operating excellence from 2005 baseline

Achieve individual community acceptance ratings for 100% of Dow sites where we have a major presence

Reduce our energy intensity 25%

Reduce our GHG intensity 2.5% per year

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14

Presenter

Presentation Notes

Our 2015 goals take the next logical step forward on our Sustainability Journey. Setting the standard for sustainability means living our vision—and earning the respect of our stakeholders. The goals look beyond our fence line and tell us how we will set the standard for sustainability. >>They are established in seven key targeted areas shown here. (chose one or two below to explain more if time permits) Sustainable Chemistry Sustainable chemistry is our “cradle-to-cradle” concept that drives us to use resources more efficiently, to minimize our footprint, provide value to our customers and stakeholders, deliver solutions for customer needs and enhance the quality of life of current and future generations: Sustainable chemistry puts Dow in a leadership position in the marketplace. It helps us: Anticipate strategic customer trends in value chain, Deliver culture change for business strategy thinking, Maximize societal value versus footprint, and Strengthen our platform for becoming the most respected chemical company in the world. Breakthroughs to World Challenges We are actively working toward, and committed to achieving, at least three breakthroughs by 2015 that will significantly help solve the challenges of: Adequate food supply Affordable housing Alternative energy Sustainable water supplies, and Improvements in personal health Product Safety Leadership We are the first chemical company to make non-technical language summaries of our product safety assessments accessible to the public on www.dowproductsafety.com. The assessments cover topics such as basic hazards, use, risk, and risk management. We will complete evaluations, with third-party process verification, on high priority products by 2010 and for all products by 2015. Local Protection of Human Health & the Environment We lead the way across virtually every facet of environment, security, health and safety performance. We were one of the first companies to introduce innovative protection equipment for our workers in 1898. We engage our neighbors through Community Advisory Panels. Our Vision of Zero is a leadership attitude and a corporate culture that is committed to zero accidents, zero injuries and zero excuses. Drive to Zero Safety Program Has resulted in more than 20,000 Dow employees avoiding injury/illness since 1996. Contributing to Community Success We are an engaged corporate citizen globally and locally. Where we have a major presence, we are collaborating with local businesses and citizens to help create stronger, safer and sustainable communities through: Engagement Establishing joint goals and plans, and Taking actions for the long-term success of all involved Energy Efficiency & Conservation We are one of the largest producers of innovative products that reduce energy use through: Building insulation applications Solutions for fuel-efficient vehicles Technology to enable wind power, and Integrated solar systems into building materials Using 2005’s Energy Intensity base to project what energy consumption would have been, efficiency and conservation improvements have yielded savings of over $190 million and 26 trillion BTUs… And we continue to drive more efficiencies and conservation. Addressing Climate Change Since 1990, we reduced our absolute greenhouse gas emissions by over 20%; more than required by the Kyoto Protocol. Over 96% of products involve chemistry, so no one has more at stake—or the ability to impact—energy supply and climate change issues than we do. Our products, across our portfolio, reduce GHGs by multiples more than our own emissions on an annual basis.

Smart Solutions for Today

Our technologies enable our customers, and their customers, to develop products and services.

We contribute to the sustainability of society and our planet by developing innovative technologies for current and future markets.

We are leaders in advancing all aspects of sustainability, openly collaborating with customers, suppliers, communities, civil society and governments.

Our infrastructure has a positive impact on our company, our communities and ourselves; our operations are a model for others, wherever we operate.

Innovations For Tomorrow

Responsible Operations

Partners For Change

15

• Partner with MEP • 2,130 projects implemented for cleaner production

Cleaner Production Demonstration Project (2005 – 2008)

• Partner with the State Administration of Work Safety

• Safety trainings for 2,500 SMEs in the chemical industry

Safety Management of Hazardous Chemicals Project (2006 – 2008)

• Partner with MEP and UNEP • Aim to establish a chemical safety management

system in China’s chemical industry

Safety Operation & Emergency Preparedness Project (2008 – 2010)

• Partner with National Institute for Nutrition & Food Safety (CDC)

• Aim to boost China’s food safety assessment capability

Food Safety Risk Assessment Project (2008 –2010)

Sustainability: Practices in China

17

• 2008-2009, Dow initiated Elm tree planting program in Yulin City, Shaanxi Province

• Partnering with Chinese People’s Association for Friendship with Foreign Countries

• 2009-2011, Dow initiated GHG Reduction Project in Shaanxi Province

• Partnering with Environment Defense Fund, and Shaanxi DOA (Department of Agriculture)

Presenter

Presentation Notes

2008年陶氏与陕西省政府合作，选择榆林沙地林业科技产业园区作为受益组织，在榆林种植榆树以协助当地社区应对土地荒漠化的挑战。榆林位于山谷地区，该地被评估为适合种植榆树减缓荒漠化进程。陶氏决定与当地政府合作来改善榆林以及陶氏煤化工项目在此地的工厂的环境。这些榆树林将环绕陶氏在榆林工业园区的生产企业。同时，最优树苗、先进的林业技术如浸润膜节水滴灌将保证榆树的成活率。中国和平发展友好基金会将在整个进程中发挥重要作用----管理陶氏第一期捐款两百四十万人民币。陶氏携手神华集团正在就在陕西省榆林建立煤化工项目进行可行性分析。在陶氏的战略转型中，陕西省是一个重要的地区。陶氏非常高兴能够与当地社区一道应对自然环境方面的挑战。��--------- 在陕西省农业局和总部设在纽约的非盈利性环境保护基金会(基金会)合作下，陶氏资助了陕西省农业温室气体减排计划。��在传统耕作方法被广泛使用的陕西启动的农业温室气体排放减少项目的目的是对陕西省的农民及其他土地管理人员提供教育和帮助，通过有益环境的土地管理方式的实施，包括测土施肥，用水效率，土壤保护和免耕种植，来有效减少二氧化碳排放量。� 传统农耕将收获后的小麦或农作物秸秆燃烧，并产生二氧化碳。按照计划，免耕耕作方法鼓励陕西农民用特殊机械设备处理秸秆代替燃烧，从而有助于减少温室气体的排放。该项目也预计将有利于扶贫及其它环境收益。��陶氏捐款十万美元用于教育和减轻在一万三千公顷土地工作的农民。约二十万农民受益，相当于陕西省中等城市人口数量。根据联合协议，三方将为陕西农民和土地管理者制定教育活动来促进政策来创造，支持和促进温室气体减排机会。��作为全球领先的科技公司，陶氏在中国致力于解决可持续发展的挑战。在陶氏的战略转型中，陕西省是一个重要的地区。陶氏参与的神华集团在陕西省的对世界级规模的煤化工项目的详细可行性研究，将成为中国最大的外商投资项目。��基于这一战略，该项目被认为是陶氏与陕西省政府及基金会合作关系的里程碑。陶氏将在有效实施该试点项目的基础上长期提供更多资源来满足社会发展的需要。

Updated: June 2010

Back Up Slides

19

Recognitions for Sustainability

- more than any other company

China’s “Most Innovative Corporation” Award

for sustainable innovation of corporate ecosystem, CEO CIO

Magazine and the Research Center for Technological

Innovation

for IMPAXX™ Dow POWERHOUSETM Solar Shingle

TIME Magazine’s

Named Eleven Times

2010 Robert W. Campbell Award

7 Presidential Green Chemistry Awards

“50 Best Inventions of 2009”

100 Most Technologically Significant New Products

of the Year

20

Presenter

Presentation Notes

2010 Robert W. Campbell Award Winner - First chemical company to earn this exclusive safety’s most prestigious award given to an organization – for demonstrating world-class operational safety performance – 9th company overall Prestigious international award for business excellence through EH&S management Sponsored by National Safety Council and 22 Global partners across 5 continents

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