Document v6L2kOB8VErO5qvJ6BzQp7yww

Nineteen Seventy-One Annual Report go CD CD CD cn CO 1897 1901 1916- 1U?1 10SG.-.1931.'..1936.. ir-os ...18.11: 9 6__ , , , - . . , J DIRECTORS AND OFFICERS BOARD OF DIRECTORS CARL A. GERSTACKER................................................................ Chairman of the Board DONALD K. BALLMAN.................................................. Former Senior Vice President EARLE B. BARNES......................................................................................... Vice President ROBERT B. BENNETT............................................................................................... Treasurer C. B BRANCH............................................................................................................. President MELVIN CALVIN.................................................................................. University Professor. University of California WILLIAM R. DIXON.................................................................. Assistant to the Director. Corporate Administration HERBERT D. DOAN................................. -.......................... President. Doan Associates Former President of the Company HERBERT H. DOW.................................................................................................... Secretary JULIUS E JOHNSON.................................................................................... Vice President J. M. LEATHERS ............................................................................................ Vice President H. H. LYON......................................................................................................... Vice President ZOLTAN MERSZEI........................................................................................... Vice President PAUL F. OREFFICE...................................................................... Financial Vice President LEROY D SMITHERS........................ Chairman. Dow Chemical of Canada, Limited MACAULEY WHITING....................... General Manager. Hydrocarbons Department, Dow Chemical USA G JAMES WILLIAMS................................................................................... Vice President EXECUTIVE COMMITTEE C. B Branch. Chairman; Earle B Barnes, Carl A Gerstacker. Julius E. Johnson, H. H Lyon. Zoltan Merszei. Herbert H. Dow. Secretary & Alternate Member, FINANCE COMMITTEE Carl A. Gerstacker. Chairman; Robert B. Bennett. Herbert H. Dow. William A. Groening. Jr.. A Philip Hanmer. Frank Harlow. Paul F Oreffice AUDIT COMMITTEE Herbert D. Doan. Chairman; Melvin Calvin, Herbert H Dow PUBLIC INTEREST COMMITTEE Herbert H. Dow. Chairman; Earle B. Barnes. Melvin Calvin. Herbert D. Doan. Carl A Gerstacker. Julius E. Johnson: James H Pearce. Executive Secretary. OFFICERS & ASSISTANT OFFICERS C. B BRANCH ........................................... President. Chief Executive Officer CARL A GERSTACKER ........................... ................. .. Chairman of the Board EARLE B BARNES...................................... ......................................... Vice President President. Dow Chemical USA WILLIAM A GROENING. JR..................................... Vice President. General Counsel JULIUS E JOHNSON Vice President General Manager. Life Sciences Department Director. Corporate Research & Development J M. LEATHERS . . ..................... ...........................................Vice President Executive Vice President Dow Chemical USA H H LYON . . Vice President. Director of Corporate Administration ZOLTAN MERSZEI .......................................................................... Vice President President. Dow Chemical Europe. S.A. PAUL F OREFFICE G JAMES WILLIAMS ...................................................... Financial Vice President ......................................................... Vice President Executive Vice President. Dow Chemical USA ROBERT B BENNETT HERBERT H DOW ............... ... ................................. Treasurer ............................................................. ... Secretary A P, HANMER .. FIRMIN A PAULUS - DAVID C BAIRD R W BARKER Controller, Assistant Secretary Assistant Controller Assistant Secretary Assistant Secretary LOIS J KOERLEIN C-EnTRUDE WELKER WILSON A GAY Assistant Secretary Assistant Secretary Assistant Treasurer DAVID N LEVERT JOHN VAN STIRUM Assistant Treasurer Assistant Treasurer DALE A SYWATER Auditor TRANSFER AGENTS the Cleveland trust company MORGAN GUARANTY TRUST COMPANY OF NEW YORK REGISTRARS THE AT.CaAu CITY sank OF CLEVELAND CHcM:CA_ BANK i Nr'.v York) CERTIFIED PUBLIC ACCOUNTANTS HASNiNS s SELLS ANNUAL MEETING The :S72 annua! meeting of stockholders wiii i;-p held at 2 pm tEST> Wednesday. U.-.x 3 m tnc- Midland Center for the Arts. St Ancinv.vs anu Easiman Roads. M : Mitmcan A formal notice of the niee'mr;. v.ith a proxy sUttompn; and form of proxy iv he maced to eaon stockholder s-m.ioVe-'V horn tnr; mpeu OO --I CD CD cn CO CO THE DOW CHEMICAL COMPANY Annual Report for 1971 HIGHLIGHTS Operations Summary (in millions) Net sales......................................................................................................... Depreciation.................................................................................................. United States and foreign income taxes................................................ Income before extraordinary items......................................................... Net income after extraordinary items..................................................... Earnings per share before extraordinary items (in dollars)............... Earnings per share after extraordinary items (in dollars)................... Cash dividends declared............................................................................ Common stockholders' equity................................................................. Book value per share of common stock at December 31 (in dollars) Average common shares outstanding Common stockholders.......................... Employees .............................................. 1971 32,052.7 218.8 91.0 154.4 154.7 3.40 3.41 81.0 1,197.0 26.38 1970"' Change SI.911.1 207.7 88.1 130.0 102.1 2.87 2.26 78 5 1.127.5 24 89 -r 7.4 + 5.3 -T 3.3 T 18.8 - 51.5 - 18.5 -f 50.9 + 3.2 + 6.2 - 60 CO --i CD CD c: > cn CO CO 45.428.561 84.633 47,800 45.287.472 90.975 47,400 - 0.3 - 7.0 - 0.8 Quarterly Results (in millions) Quarts^ Endec 3/31 6. 3C 9/30 12/31 TOTAL Sales 1971 S 486.7 526.3 522.7 517.0 $2.052.7 1970 S 456.6 493.4 480.4 430 7 Si.911.1 Restated --see Note A. page 34 Earnings per Share Before Extraordinary Items (in dollars) 1971 S .73 .93 .95 .79 S3 40 1970! S .70 .83 .75 .59 S2.37 Products and Services Operating Income 1971 S 64 1 84.9 81.6 54.2 S234.8 1970 S 59 4 76 1 6S.3 55.8 S259.6 CO ,i CD CD c: > cn CO CD It Was A Very Good Year In many respects, 1971 was a milestone year for Dow beyond the simple chronological fact of reaching our 75th, or diamond anniversary, year: -- The Company exceeded $2 billion in annual sales for the first time; sales were S2.053 billion, up 7%from 1970. -- We invested more for new plant abroad than in the United States for the first time in our history. -- The Company set a new record in earnings at $3.40 per share, up 18%. One significant event of 1971 for Dow was President Nixon's new economic program. This program has had a favorable impact on Dow, as it has on countless individuals and other companies. We have been and are a firm supporter of the President's effort to stem inflation and restore order to the world's currencies and markets. Partly as a result of the President's program, we will again spend more than half our expansion dollars in the U.S. in 1972. To us, this is both significant and desirable. There were several major reasons behinc the very good year the Company experienced in 1971. These included our extraordinary diversity, a good product and geographic mix, higher prices, an interest cost substantially below that we budgeted, and excellent cost controls soundly administered. The Latin American area had the largest percentage volume and earnings increases o? all Dow's areas. The Canadian area rebounded strongly and had the second -best improvement. Beginning with 1971, we are consolidating Dow's equity in tire earnings of 209-50% o\\ ned companies. The emergence of the Dow Badlsche Company as a strong generate' of earnings in 1971 gives this change in reporting spec.a!significance; until tins year, that company had operated at a net loss. The turnaround from a net minus to a good plus reinforces oik confidence in the future of this enterprise, a joint venture with Bsdische Amiin &. Soda-Fabnk A.G. Financial Outlook Good Capita! expenditures in the year amounted to $365 ;r% on. compared to S343 million a year ago. and are forecast lo continue at about the 19~1 level m the current year. Our genera! financial situation continues to oe sound. Our liquidity is very gooa. One of : -- most encouracing aspects of our business during the year was line continued firming of chem.cal prices. These began turning around in 1 970 after 13 years of decline, and our price index went up almost 2% during 1971. Late in the year, the new Price Beard granted authority to Dow to raise prices cv a cn CD CD c_n 2% average across the board on its products. We were the first chemical company to gain this authority, and the pattern has now been extended to the chemical industry generally. We feel we can live satisfactorily with the 2% limit. However, we are seriously concerned about the fact that controls on wages and pay have been appreciably more lax than the stringent controls imposed on prices. This imbalance can be damaging, if not fatal, to President Nixon's economic program-and thus to the welfare of all of us, individuals and companies alike. We were encouraged in 1971 by the passage of legislation enabling the establishment of Domestic International Sales Corporations (DISCs), through which tax deferrals on exports are possible. This will help Dow U.S. exports, and we moved'immediately to take advantage of this legislation. Average Age of Directors is 52 Years The average age of the current board of directors is just over 52 years --a remarkably young average, we believe, for a major corporation. At the January 1972 board meeting. Dr. Leland 1. Doan and Max Key retired from the board of directors. H. H. Lyon, a vice president, was elected to the board, which was reduced to 17 members. Dr. Doan was in his 55th year or service with tne Company. As most will recall, he was the fourth president'of Dow. from 1949 to 1962. He served as chairman of the executive committee until I9 60. Mr. Key was in his 44th year of Dow service, most recently as director of Corporate Administration, in which capacity he was succeeded by Mr. Lyon. Dr. Doan and Mr. Key have made magnificent contributions to the company curing their distinguished careers. The\ cave devotedly of their talents for 99 years between them:, and the benefits to us all are immeasurable. Dunne tine year, the board adopted a rule reauiring its members to relinquish line responsibilities at age 60. This wiii help us to maintain vigor in the upper retaches of the Company. In fact. Donald K. Baiiman. senior vice president and an employee since 1935, set an example for oilier members of top management by requesting at the end of the year to be relieved of line responsibilities. He continues as a consu.taot and a member; tlie board. Expanding Job Opportunities Along with ethers throughout the .ismess world, we have reached the conclusion that there is a massive under-utilization of ti talents and cspabisties of women employees. During the year, we engaged in a continuing study of this problem. ; have concludes that more intelligent use of our career women will do more than increase their job satisfaction; they represent one of our greatest potentials for productivity improvement. As a result, we have embarked upon a campaign to seek out, 'develop and promote female employees. We are continuing our efforts to expand our minority employment and advancement at each and every Dow location in the United States. We are also emphasizing the development of foreign nationals in all areas of the Company. The growth of employees of highly disparate backgrounds is a matter of considerable pride and satisfaction to us, and certainly to me personally. Environmental Battle Continues Dow is determined to provide excellence and leadership in the battle to improve our environment. During the year, we developed global environmental performance standards for Dow plants. We believe we are the first major company to adopt such worldwide standards. We hold that a cleaner environment is necessary not just for the sake of good citizen ship, but also because it is good business. We have continued to search out areas of waste of raw material and end product alike, and have worked to decrease these wastes in every way that is technically feasible. In so doing, we increase the quantity of our salable product, reduce00, the dimensions of our waste problem, and help prevent pollution. OUr long-range goal, in fact, is zero pollution. We are convinced that this approach is ci? the soundest possible to the problem and the most sensible policy for a business enterprise cw that strives to be both profitable and socially responsible. r* Research, Manpower, and Productivity We are a research company; we are a ^ science company. During 1971, our research and development expenditures again approxi- r,3 mated 5% of net sales. A remarkable collection of new products is coming out of our laooratones, and some are described in this report. I am more enthusiastic about the new products we now have in the pipeline to commercial development than I have been for many years-and I have spent most of my life m the development end of the business. Products introduced within the past five years accounted for about 9% of our 1971 ret sales in the United States and for comparable percentages in our other areas. I also derive great satisfaction from the fact that we have been able to maintain our employee population at approximately the same level for the past four years in spite of unsettled monetary conditions and a slow economy in much of the world. We have been an exception in the U.S. chemical industry in that we have not had massive forced layoffs at amv time or location --and none are needed. Our manpower costs have remained at about the same level, in percentage of sales dollar. At the same time, employee productivity has ccntinued to climb. The net result has been that in spite of a sluggish economy, we have continued to see rising sales and increased profit per employee. Confidence in Future It is natural for company presidents, when writing in their annual reports, to be overly optimistic. I recognize that. I also recognize that a company of this breadth and magnitude cannot be without pmolems. For instance, we want to do a better job in the area of minority race employees. \\e are working hard on improving our employment balance, and we have already made s.mstantial progress. In total. I think it is fair to say that we in Dow are proud of our accomplishments and cevident of our future. I continue to be optimistic about your future satisfaction with this company both, as a performer and as an investment. -Ternary 1972 J GEOGRAPHIC & PRODUCT RESULTS Geographic (dollars in millions) 1971 Sales 1970 % Change 1971-% of Total Company United Stgtes....................... Europe/Africa...................... Latin America....................... Canada.................................... Pacific..................................... SI.194.5 485.3 153.2 138.7 81.0 TOTAL..................................... S2.052.7 SI.139.8 430.8 132.8 126.2 81.5 $1,911.1 + 4.8 + 12.7 + 15 4 + 9.9 - 0.6 + 7.4 58.2 23.6 7.5 6.8 3.9 100.0 Products and Services Operating Income 1971 1970 % Change 1971-% of Total Company $149.1 83.4 25.9 14.1 12.3 $284.8 S144.1 79.0 14.7 10.6 11.2 S259.6 + 3,5 + 5.6 + 76.2 + 33.0 + 98 + 9.7 52.3 29.3 9.1 5.0 4.3 100.0 Gross Plant Properties 1971 1970 1971-% of Total Company United States.......... . ... SI .807 6 Europe/Africa.......... 611.7 Latin America........ ........ 76.7 Canada...................... 2108 Pacific....................... 16,1 $1,777.1 463.3 67.5 190.7 19.7 66.4 22.5 2.8 77 06 TOTAL $2,722.9 S2.524.3 100 0 Capital Expenditures 1971 $165.1 158.3 134 24 0 38 1970 1971-% of Total Company SI 92.8 109 9 IcS 24.3 2.3 45.3 43.4 3,7 66 1.0 $364.6 S343.1 100.0 Employees (thousands) 1971 28 0 11.2 50 2.5 11 1970 28 9 10.8 4.2 24 1.1 1971-% of Total Company 58 6 23.4 10 5 5.2 23 47.8 47.4 100.0 GO _ * CD CD CO Product (dollars in millions) 1971 Sales 1970 1971 -% of Total Company Products and Services I Operating Income | Capital Expenditures 1971 1970 1971 -% of Total Company 1971 1970 1971 -% of Total Company Chemicsts Meta.s .. .. SI.0086 S 917 5 Plastics Packaging. . 647.1 638 2 Bioproducts' Consume: Products .. 399.0 355.4 49 0 31.5 19 5 SI 23 9 109 1 51 3 3103 7 101.0 49 9 43.5 38.3 18 2 S291.2 43.5 S257 5 59.6 29 9 31 0 79 9 11.9 8.2 TOTAL.............................. . S2.052 7 SI.911.1 100,0 S284 8 $259.6 100 0 S364 6 S343 1 100.0 WORLD OPERATIONS *i 6 $ * 0 0 0 UNITED STATES Nineteen seventy-one was a year of marked improvement for Dow's business in the United States. A trend for the better started in the soring, and the year ended with a 5% sales gam and a 4% rise in operating income. Exports were up by 1 5%. Dow's weighted index of U.S. selling prices, which had firmed in 1 970 after a 1 3-year decline, recorded a 1.8% asm in 1971. Inorganic chemica.s. designed products, plastic molding and extrusion materials, and Dowell Division achieved the best earnings advances. Dow's U.S. capital expenditures declined more than 10% from 1970. U. S. manufacturing facilities operated at 81% ot capacity. Capital and operating expenditures for waste control aggregated S25 million, not including the cost of process improvements that reduce or eliminate wastes. We continue to be optimistic that the-over-all job of environmental protection can be done at no net cost insofar as Dow is concerned. This is based on our experience with increasing yields through improved manufacturing processes, recycling wastes, and marketing pollution-control products and technology to others. Increased sales and operating income were reported by Bio-Science Laboratories, a member of the Dow Life Sciences Department. Tins wholly owned subsidiary reorganized to promote an orderly expansion in the clinical laboratory and related fields. Tiie uncertainties surrounding Phase II of President Nixon's new economic pronram have subsided, and the resultant buovmg of confidence indicates hrnher business levels in 1972. That, combined with a better supply-demand balance in the chemical industry, leads us to anticipate another vear of sales and earnings growth for Dow in the United States. EUROPE/AFRICA Dew sales in Europe'Africa registered a 13',- g. m cprecpmeu to 1970 cresoue generally lackluster business conditions ri.miv:: th-- c:o?.mo months of 1971. The cimn m operating income was ..mitad to 6%. one facto' being a sharp rise in depreciation charges stemming iron. beam. capita! expenditures. Larges: percentage smes increases were achieved in the Benelux c-X.ntr.es. hag France the Iberian Peninsula, and Eastern Europe. Among crrducts. hydrocarbons, functional products, and plastic molding and exirus'-on mateca s were tire biggest gamers Tne c.meu: '-.em re expected to be another difficult one for a large can oi tire European economy Cnitre. - .pen.;; ware 1 v Dow r. Europe here- a; an uli time high. Tne now pmrecex at Static, Germany, accounted for the largest psrg.m , .re-re cure:: by tire come.ex a* Treneacen The brether.w :$ G-ufits' excreta teres at tne Dow. Ungu-nesa p.anl in Tarragona. Scout Dow. E./cc- on mem uactur.ng fac, sres we -- t'resource of 739 re area a; as rex: w'-ware-b at S2 p? capacity The availability of ma-uo.b 'v" are res' coxatmg units ot Stare- y.i,. in- a rreimua mono Ereooean c::sro;;o:> r: G.jpoo Lepetit S.oA, : mis--re; sna mug tan; naseu m .VI:inn. Italy wree well ahead of ' w?0. Tne Ereop-ren c;: macec/irai maiket demonstrated some :-u;ure : tne v-'-ir ;:-1 prer.ed up cop.si.K-remy m Novemb-e ,-.r t .. -`mi ' Jt - uuutre wrere- su;c,:.c pb re ip:is to hold tire: L;on mere mo ret;; .re.., in tv limt n-'-u. t,.uu,t.x and uu '-reu-............ . .u, ut -u; -....pr'. re- Rifadin in;.I .-re LATIN AMERICA Latin America delivered the largest percentage gam of any area, with sales and operating-income increases of 1 5% and 76%, respectively. Improvement of operating margins on chemicals end plastics was a noteworthy contribution to the gams. Substantial sales increases over 1970 levels were recorded m Argentina, Brazil. Chile. Peru. Puerto Rico and Venezuela. The Brazilian economy was especially strong throughout the year, and all signs point to a good year in 1 972. Wholly or maiority owned local manufacturing facilities produced almost half of the Dow goods sold in the area. Petroqufmica-Dow. a 70% Dow-owned company m Chile, operated satisfactorily throughout 1971. A strong network of Dow terminals is being established in Latin America, enabling us to serve the needs of customers from many locations. Terminals are now in operation at Tuxpan. Mexico: Cartagena. Colombia; San Antonio. Chile: La Plata. Argentina; and Guaruja. Brazil. A site has been purchased at Puerto Cabello, Venezuela, for future plant and terminal development. Life Sciences activities accounted for about 30% of aiea sales. The bulk of these sales are made through affiliates of Gruppo Lepetit and through Laboratories Industrials Farmaceuticos Ecuatorianos. SGS* 0 0 0.1 S CANADA Despite revaluation of the Canadian dollar early in the year, which'increased the competition from imports. Dow's Canadian operations increased sales 10% and operating income 33% in 1971. Agricultural products were the biggest gainer. Chemicals and packaging materials also recorded sizsoie advances. Although construction materials perfoimed very well, the over ail results from plastic products were disappointing Sales of Life Sciences products were off. mainly because o! increased competition m measles vaccines arc other bioiogiculs Business conditions in Canada were sluggish for the first seven months continuing the siovv pace of 1970. hut the trend was up fc' the rest of the year. The supply-demand balance for products made bv Dow Canada was genera-iy good, and the company's manufacturing facilities (which supply 7 7% of the Dow product sold m Canada: operated at 86% of capacity. The 1972 outlook is for continued improvement in economic conditions in all regions c; the count",-. PACIFIC Dow sales in me Pacific v.ere about level with I 970. However, operating income for the aea was up 10%. primarily becu of improved selling prices and the ev:-rationale strong growth or agricultural products. Aus tralia/New. Z-cbaiv: took over : ; m Jctp-an ":$ G;j:- No 1 suet region with a 24% gain I: pm t OUS year Or me nd for oui products was firm across tlv 'o.-rA In j GOGH, SGcS G'?'. : 25' - 0:5 g r3.i-t of geHr'V. v dm If - , . t business condmons. pm:, culari v m sc:' .. seametvs or the pet roche' inclust ry No sanaeuw aoprrr 'f-OV-iu , n tins md'..;strv : S inr-V-- i t Cu nrst h aif 1 972: how- a os Or S to V.. Dow eg ricuit-j m. r iucts , exceo tionuliy bight A e.. v Q cnrrr-- ; subsma;r`y of Gruppo Lep-v h--gun operation.' m Jam HI 1 V71 Dovv's busitv-s m So C;r. ctiv East ~V : WOSP. o es ip. V: V' ittor: political and economic u. ;P( V-\K3ns Vvr i-aluncec i oroci net . inci C'30j r('.pineal mix piomcs. us l rom U'v %feels O': unv; .-oral; 4' nsvvc)pmonts in any irn:h-GOUG count" V v'sn,-,,, L- ' iniges! nu'i a ; jr.it .r, 'V: n f-\'' r Am 'HO, Ajst *\ ilia, ope:ate-a ui / CGLJ GlV isJ PUViU'VG : w r 14 r'! tGl,: Pace ic A-ea Sale--,. | fAw LINA RE: h. \*'"i CJIV^A( > ^-Chilian; Concepcionrac vc^8le ^ ---------i CONCEP _ , araucc^* .e.Los Angeies /, -N* , g "V I Altona^LaS"0"1 . . v-*'* \ U3n<3cnong Gedong^CC* ' / Warrsgyio ci3c ^ / "S v V' f OiavJinac oCne! Suare/ , ngifso Bohio Blanco >?fo Cc<'o'ocosS^ c I-res A. rroyos * on _* it CO cn <_> cn co cr> W&Bat.',ha-rp-^. ed'-wm^'r -i 9.71 /' A capsule view of major events'at Dow locations 2CSV000IS Freeport, Texas --World's largest phenol plant (400 million pounds per year capacity) comes on stream in Oyster Creek Division . . . Ethylene modernization program in Texas Division resumes; older units replaced as result will be kept on standby pending future access to foreign feedstocks for ethylene . . . Million-dollar laboratory for urethane chemicals development opens. Stade, Germany --Building pace quickens at Dow's new chlor/alkali complex with SI 10 million worth of facilities under construction and first units scheduled on stream m 1972. Midland, Michigan --Ten thousand citizens publicly rally behind Consumers Power Company's proposed nuclear plant, for which an Atomic Energy Commission construction permit has been pending. The facility would provide an economical and clean source of electric power and steam for Dow's Midland Plant and the surrounding community. Tarragona, Spain -- Large-scale construction program in progress at Dow-Unquinesa (85% Dow owned). High-density polyethylene plant completed, existing low-density polyethylene plant expanded, and ethylene storage facilities built. Plant for Voranol polyols under construction. Terneuzen, The Netherlands --Second naphtha cracker with capacity of 400.000 metric tons per year constructed. Sarnia, Ontario -- Use of mercury in chlorine production by Dow Chemical of Canada, Ltd., to be phased out. completely eliminating mercury losses to the St. Clair River now averaging less than a tablespoon per day . . . New Dow Canada "total energy" plant due for start up in 1 972 will provide bulk of the electric power and all of the steam required by Sarnia Division, ending reliance on price-escalating purchased power. Plant will be fueled with Alberta natural gas, contributing still further to pollution -abatement program that began three years ago when fuel oil and natural gas were substituted for coal to generate steam. Grand Rapids, Michigan -- Dow phosphate process, operated for the first time with fully automated equipment, meets state standard of SO', phosphates removal Forty five other municipal wastewater treatment plants where the process has been demonstrated a so meet this standard. U. S. Surgeon General's opinion that nonphosphate detergents are unsafe puts new emphasis on removal of phosphorus at wastewater-treatment plants as the only real solution, since enough phosphorus from other sources t.nan detergents wou.c stimulate algae grow th Bay City, Michigan -- Record year for Dow experts through the Port of Bay Citv with 92,000 short tons shipped compared to previous record of 51 900 tons. Dow is urging extension of Great Lakes navigation season from the present epiht months to 1 1 or 1 2 months. Ulsan, Korea --Construction of lew density po yetnyieiw cm; vinyl chloride monomer plants started Icy Korea Pacific Chemical Corporation (50:: Dow owned) Concepcion, Chile -- Dow's biggest plant start uo in Latm America completed as low-density powethyiene ethylene aichion.de, vinyl chiond-3 and pc/wnv: chloride plants of Petroqui'm-ca Dow S A 170% cw nedi come on stream, Altona, Australia --Further diversification at Dow Ch-mmca .Australia' complex with star; of construction of propylene oxide derivatives plant. Bahia Blanca, Argentina-Dow participation in petrochemical complex restructured. A; ger,tin-- government takes responsibility for building an ethylene plant Dew plans to build ''dov/nstiaam" plants when practicable. 9 THE-GLOBAL MONEY CRISIS OF 1971 - The year's biggest economic event and how it affected Dow Chemical From a business viewpoint, the year 1971 probably will be remembered vividly as the year of the money crisis. It became near early in the year that the dollar was in trouble as the U. S. faced a huge deficit in its balance of payments with ctns: countries. The real beginning of these problems is rooted in tine years following World War II. The U. S. came out ol that war strong and prospe-cus and began helping the rest of the world back on its feet. That was fine --and necessary --b..: it was a case of too much, for too long. Starting from, a strongly positive balance of payments position, it was easy for the U. S to give vast sums ir. foreign aid and to set up troops overseas to help keep the peace. But over a long period the situation changed. The balance of payments gradually deteriorated until several years ago there were more dollars leaving than coming into the country --even though exports exceeded imports Then tr. 1971. even that changed --the U. S. imported more than it exported for the first time in the 20th century in plain words, the U, S. had been decapitalizing --much like a family living beyond its income, or a company paying higher dividends than us earnings. By the spring of 1971. things had begun to reach the crisis stage. Confidence m the dollar reached an aii-t me low. Huge amounts of collars were used abroad to purchase other currencies, deluging the central banks of Europe and e sewhere. Extensive revaluation of currencies (by allowing exchange rates to ''float" upward) followed in foreign countoes On August 1 5. the U. S. faced the basic issues squarely by imposing a temporary 10 per cent surcharge on .imports and stoccing the exchange of dollars for gold. At the same time domestic inflation was attacked by putting a freeze on wages and paces. Economic turmoil among America's trading partners increased in August, but by mid-December, with the premise of doliar devaluation and revaluation of other major currencies, the world monetary crisis was over. What does this mean in the United States7 ; \ j [ I j i j * : t j } ! f : S1 00 04593 O Board Chairman g Gerstacker (left) and Financial Vice President Oreffice o Q I From world currency adjustments. a positive effect 0 O 0 (; O CJ C-r e\i;s,cr is nothing to be ashamed of It s simply a long ovcioue recognition pi the v.uy things are. a nat.a consecue-of the U S. trying to do too mu:'-i to help the rest of the world L-. . . tt.cr. v., . make the exports of U S companies cheaper in other countries and tlv.refore more compete whin imports :: the U. S w:: cost more. The ccmomoticn of these factors should improve me U. S balance of trade In '-gctiat cr. with other countries the Administration has recognized that an improvement m our tiarlp halanc- ; not going to -;e -row:- -n the long term. So the U. S. is trying to persuade the other deveoped nations to pay lot a lara: poire of defe'Or e>.::-:-n.::.:u'es Major efforts are also being made to remove some of the artificial restrictions thru have long hampe'-:: d S -o.eeos w --is concerned, de'.'a-uei'on ot me cionar and revaluation ot othe: s.-r-enoi-s v.ii, hav- a ipcitr.-v s-p on ear:' r - w devaluation wil. ms-,e w..v. 5 .American iraae products -van mo;-; conipn.:m ov--'rseas mai-.-p: So v\r - po.s- o.n exports from the U. S lit ''act wc noea-fiy have expoitsd prom..::, to cc ."tri-o nirpe wo ha.- ~.v I'- ` - c :: i-h-; '.wind. our contracts at- in Waal currency am: a an- !omp:r. canvnc'.. -ev mss on1 sal:-a t: in that o' as: rp.a..uo. In effect, w- so at hm1'-: order pipes v;.- j-a v. -*" Dm JmUVr-Y A!SO. 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AOn'.CAliir DOSiUO rf : a,n.'.as; Iv 10 PARTLY OWNED COMPANIES Dow's share of the sales of 20%-50% owned companies aggregated approximately $350 million, up 22% from 1 9 70. In 1 971, for the first time, Dow's equity in the net income of these companies is consolidated in our financial statements -SI 8.9 million in 1971, compared to $6.8 million in 1970, both before extraordinary items. Previously, only the dividends from these companies were consolidated. Among these companies, the major development in 1971 was Dow Badische Company's dramatic change from an operating loss to a substantial profit. This was due to improved product quality, increased capacity, and operating efficiencies. The company's sales have continued to rise at a faster rate than those of the industries it serves. Expansions were completed in nylon 6 carpet and fine-denier yarns and acrylic fibers. Universal Textured Yarns. Inc., acquired by Dow Badische in 1971, was reorganized and enjoyed a very profitable year. Bentex Mills, Inc., SCO Dow Badische-owned. also contributed to the profit turnaround. Ber.tex is a unique, fully integrated double-knit facility performing commission knitting, dyeing, texturizing, and finishing and is currently tripling its capacity. Dowell Schlumberger, which performs the same oil-field services in the rest of the free world as our Dowell Division in North America, rebounded from a slow 1 970 with strong gains m revenues and net income. The company has been experiencing a salutary diversification of revenue sources and is no longer dependent on drilling activity in a lim.ted number of countries for us growth. Sales and operating income of Dow Corning Corporation increased moderately in a generally difficult year for many of the major mdustr -ss it serves. The company increased from 40% to 100% its ownership in Midland Silicones Ltd., a major silicones producer in the U.K. Interna . the company took much constructive action to stimulate improved pricing, productivity and profit levels. In the face of a share downturn in the Japanese economic grov.t" rate, Asahi-DowLtd. set new sales records. Tire company posted on-rdf the best earnings records of any Japanese company in the petrochc" :a! field. During a year of international financial turmoil. Bank Mendes Gans, Amsterdam, improved Dow's flexibility in the European currency mama's through its currency ciea-'-ng and collection systems Banco Cidade cs Sao Paulo continued its growth and is now operating four branches " kev Brazilian cities Austral-Pacific Fere .zers, in which Dow he.-a a substantia! mm; interest, and other Aust.-a ian fertilizer companies of the 1C! of Aust.v a group have been combined in a new company. Consolidated Fertilizers Ltd. This reorganization should produce improvement m wha; has kee" a poor earnings performance. Dow owns slight y less titan 20% of the new company In Korea, schedule?, progress was made on, construction of the low density poivethyier.h and vmyi chloride p'ants of Korea Pacific Chemical Corporation. Operations of this S45 million complex aio seneduied to commons-' -n third quarter 1 972 During 1 971. Dow realized S3.7 million (before income taxesi barn the sale of its 50T interest m Phrix Werke A. G.. the Gmman fiber producer Out entire -'-8 3 million investment m th,^company lead l.-e" wuiteii off m I 5 70 a ire' the firm experienced seuous fm .moui . difficulties GO --I CD CD eO cn GO GO 11 - 197T ANOTH E R G R EAT Y EA R FOR NEW DOW PRODUCTS AND APPLICATIONS Starting at the top left and winding down the rock face are composite foam (thermoplastic plus urethane) for improved automotive seating and crash padding a Dow Pressure Relief Joint Filler (made from Ethafoam polyethylene foam) for highways a Zectran insecticide (see page 24) a Dow Window Cleaner and Detogger tnin-wall beverage bottle mace from Dow polyethylene a plastic pitcher combining wood-grain and smooth surfaces Dow cartridge filter for drycleaning machines Dow Windshield De-icer a Dow Radiator Coolant Additive a Dow Radiator Flush a Cow Radiator Sealer "Thermo-Serv" vacuum beverage bottle with tough outer shell of Dow ABS plastic a Dow Oven Cleaner with new lemon scent a foam jacket for thin-wall soft drink bottle a laboratory device based on hollow fibers (an extension of our artificial kidney technology) a sandwich panel for recreational trailer with core of Styrofoam brand plastic foam a Touch of Sweden hand lotion in a new. extra-rich formulation a Dow Auto Freshener a Rifadin antibiotic, newly registerec in the United States (see page 22). 12 ' The young lady with the outstretched arm is swathed in polyester double-knit fabric that underwent the necessary scouring i v|a new. continuous process cased on Dow solvents and technology, preventing stretch and distortion a The young man holds | a flask filled with Dowex ion exchange resins --Dow now produces a complete line of resins for water softening and other I conditioning chores B To his ieft and across the way are T-valves representing a new line of Dow plastic-lined piping products 1 ' with liners cf Teflon fluorocarbon To his right is a Parsons table molded all in one piece from Dow ABS plastic resins On the table are a Pair of cups and a sheet of the co-extruded. multilayered thermoplastic film from which they were formed The young lady at left is holding a "Hurriorawer" refrigerator storage compartment, of Tyrilstyrene-acrylonitrile plastic Opposite is a snowmobile seat made of urethane foam with an insert of Ethafoam polyethylene foam for shock absorption To her left is a vanity toe with an acrylic-shae: surface; Saran microspheres in the backing help prevent shrinking and warping Behind is a piece of "Fashionaire" luggage with framework of Dow magnesium extrusions. I 0 9 10 0 01 S HOW DOW'S MAJOR PRODUCTS FARED IN 1971 CHEMICALS Sales of inorganic and organic chemicals and derivatives increased moder ately and operating income was up substantially. Major factors were the continuation of the tight worldwide supply-demand balance for caustic soda and sustained healthy growth for propylene oxide and its derivatives. Methocel cellulose ethers for paint thic-tening and other uses were very strong. Sales of magnesium oxide and hydroxide were adversely affected by the recession in the U.S. steel industry; ethylene dichloride and vinyl chloride monomer, by a slowing in the world wide growth rate for polyvinyl chloride. Ethylene oxide and its derivatives were in excess supply. As expected, sales of ethylene dibromide for use in antiknock fluids in leaded gasoline began to slip, but we see other uses such as brominated fire retardants taking up the slack. Price attrition hindered the performance of Vorano/ polyols in the early months of 1971, but both pricing and demand strengthened in the second half. As the major supplier of these ure thane chemicals we are forecasting an average 14% growth rate for flexible urethane foams over the next five years. Global demand for chlorinated solvents was substantially unchanged but is expected to im prove in 1972 with- better economic conditions. The increasing worldwide emphasis on ecology and toxicology will enhance the market for Chiorothene solvents, which are low in toxicity and can be recycled. METALS Primary magnesium had a good year. Sales, including those to the aluminum industry for alloying, were slightly higher and operating income rose substantially. Construction of our new primary plant at Dallesport. Washington, has been delayed pending clarification of power availability and market demand. Primary magne sium sales are expected to be adversely affected in 1972 by the increasing competition of U. S. and Japanese small cars with the German Volks wagen, which uses about 40 pounds of magne sium castings per car. and by the advent of major new U. S. competition in the primary magne sium industry PLASTICS Again, as in 1970, global sales of our plastic molding and extrusion resins rose moderately and operating income gained sub stantially. The profit increase was aided greatly by low-density polyethylene; prices were slightly higher and volume was up. primarily in Europe. Operating income from high-density polyethyl ene was off because of industry over-capacity and price softness For Styron polystyrene, our maior piastic material, operating income gained. Sales of Dow ABS (acrylonitrile-butadienestyrenel resms improved considerably. In 1972. the product line will be broadened with the in troduction of high-impact formulations, and some new capacity will be available. Operating income from coatings was up sub stantially The recreational-vehicle and low-temperature space-insulation markets contributed to in creased sales c-f Styrofoam brand plastic foam, offsetting wearness in the construction market Profits from Styrofoam were up fractionally. The use of Ethafoam plastic foam in safer seats for snowmobi'cs promises to help thus product conunue its modest sales growth and strong contriPLition to profits Significant profit gains for plastics are ex pected again in 1972. PACKAGING Despite level sales, operating in come was up markedly, with commercial films as the major contributors. In the face of in creased competition, Saran Wrap plastic film (industrial) maintained its performance on the strength of manufacturing economies and higher prices. Polyfilm polyethylene film continued to benefit from earlier manufacturing improve ments and judicious selection of markets. A new, highly efficient plant and continued market acceptance, particularly in window en velopes, put Trycite polystyrene film on a profit able basis. Sales of Saranex co-extruded multi layered films began what appears to be a sustained rise as new uses developed in pouchpackaged beverages. LIFE SCIENCES Over-all sales and operating income gained substantially. Rifadin antibiotic for use in treating pulmonary tuberculosis continued its worldwide sales growth, and registrations were granted in the United States and Japan. Gamulin Rh. Rh (D) Immune Globulin (Human), a means of prevent ing hemolytic disease in the offspring of Rhnegative mothers, was licensed in the U.S Equiiid sulpiride, a new prescription tranquil lizer, was launched in Brazil. AGRICULTURAL PRODUCTS Sales improved substantially. Operating income declined be cause of higher depreciation charges and major new plant startup costs. Herbicides made the largest sales gain as the price-strengthening trend which began in 1970 continued. Particularly outstanding were the performances of Tordon herbicide for rangeland brush control, phenoxy herbicides (2.4-D and 2.4,5-T), and phenolic herbicides, of which Premerge dinitro weed killer is an example. Our coccidiostats for the control of poultry disease and fumigants for controlling termites and a variety of soil and storage pests were additional major contributors to operating in come. Zectran and Dursban insecticides, Plictran miticide and Kedlor biuret, a nonprotein nitrogen source for cattle, continued to show promise for the future. CONSUMER PRODUCTS Increased competi tion for Saran Wrap brand plastic film (house hold) and high launching costs for new products depressed operating income, although over-all sales were slightly higher Handi-Wrap brand plastic film again outsold all other polyethylene household wraps combined. A new embossed, high-cling formulation of Handi-Wrap (with "Touch Control") was introduced early in 1972. Aztec suntan products and Handi-Wrap bags were withdrawn after failing t`o meet regional marketing goals Three other products in re gional marketing --Zipioc brand plastic food stor age bags. Dow Bathroom Disinfectant Spray and Touch of Sweden hand lotion-- continued to per form satisfactorily DOWELL DIVISION Price strengthening for oiland gas-well services restored Dowell's operat ing income to 1969 levels. Gas Free, a new process for stimulating gas wells, was intro duced and achieved production increases sub stantially greater than conventional processes in the first IS wells treated 1J t/V --I CO8) CD CD CO ? i > it!'.'-" -:K ?W Z%u' '-' S--C3% --' ^_-vl` _-_---* - - - ill ^ " ' ' T<^U . K v.v.-3 JpP^*. t<- - -j flPm. fe* ^,c-' - ,'^^i^V52*5iL ~'^i V -rN ^Ae3'i$hK W$_JL_... --1 .. ^ _t; >`. ^ttl-tk^-l ''^r.'i.rrTr-f^xjr s7ooet6cn They have been called "The Fab ulous Years"--those last years of the Nineteenth Century when the United States was emerging as the I y lusty, brawling new giant of the world's * industrial powers. And fabulous they were. It was in those years that The Dow Chemical Company was born in the little backwoods town of Midland. Michigan, an event scarcely worthy of notice in the larger world. And yet as a child of this remarkable era --and seeming to draw strength from the raw energies of the times--it would grow in 75 years into a globe-girdling enterprise with assets of about S3 billion. And this sum was roughly six times the average annual expenditure of the U. S. Government from 1896 to 1900. The Dow Chemical Company was incorporated May 18. 1897. On that date a small group of Ohio and Michigan business men declared themselves willing to risk $200,000 on this proposition: that 31-yearold Herbert Dow could profitably extract chemicals from Michigan's subterranean brine by using a new process of his own devising. They took the risk even though Dow was less than 10 years out of Cleve land's Case School of Applied Science, his process had proved faulty in the past, and he had twice failed to produce results that could match his promises. But these were scarcely believable times when men and women engaged in scarcely believable pursuits with an un shakable faith in themselves and the future of their country. Canny Senator Mark Hanna voiced the sentiments of many when, after master minding the election of William McKinley to the Presidency in 1896. he sent a jubilant telegram to the victorious candidate saying. "Gods in his heaven, all's right with the world " Of course, all wasn't right with the world. The chasm was infinitely wider be tween the rich and the poor, the white and the black, arc the worker and his employer than it would be 75 years later. Anarchists even then were crying for the overthrow of the Establishment and creating terror with bombs Discutes between labor and man agement often exploded into bloody riots. The issues of sound money (the gold stand ard) versus free silver, and protective tariffs versus free trade, were bitterly fought. More and more women were voicing their outrage over the clerks', of the vote. And the Federal Government did little to control the excesses of money barons and powerful business monopolies Tire -'amous newspaper publisher. Joseph Rumier. found a new word to de scribe the Americans o1 those years. The to word he coined was "indegoddampendent." And yet the often unbridled independence, the turmoil, the divisions and the stark contrasts--as well as the absurdities of the time--were merely a part of the mosaic depicting the movement of America toward the Twentieth Century. What was happening in the outside world while Herbert Dow was struggling to get his little chemical company underway in 1897? Let's take a look back to that year. .. Sod-busting farmers, miners, tradesmen, land speculators and adven turers were pouring westward to seek their fortunes in Oklahoma Territory, the Dakotas. Nevada, Utah, Kansas and other vast stretches of the last frontier. A great many succeeded and some failed, but all could sympathize with the Texas settler who had abandoned his cabin and left a sign tacked to the door: "250 miles to the nearest post office; 100 miles to wood; 20 miles to water; 6 inches to hell. God bless our home! Gone to live with wife's folks." One out of every 19 Americans owned a bicycle and they were spending $12 million a year on spare parts and acces sories. Bicycle racing was among the most popular sports and drew as many as 25.000 spectators, mostly on Sundays. This Sabbath racing moved one nations' magazine to declare: "It should be prohibited. The spectators of Sun day bicycle racing are not the class which stands for law and order." F. E. Stanley founded his Stanley Steamer Company. Two years later one of his automobiles steamed to the top of Mt. Washington in New Hampshire, to the hur rahs of the few who were interested in such self-propelled contrivances. The au tomobile hardly seemed a challenge to the horse although the challenge was just around the bend Railroaas were binding the nation together with bands of steel criss-crossing the land --and 90% of the country's steel production was going into rails. The United States had half of the world's railroad mile age, and a statement by James A. Garfield 24 years earlier still was valid: "The railroad is the greatest centralizing force of modern times." The cry of "Gold!" echoed from the Klondike in Canada's Yukon Territory, luring tens of thousands of men and women to the frozen north in the century's last great frenzied rush for the yellow metal. The United Slates was producing and consuming moic goods than any other McKinley delivering inaugural address On the agenda, tariffs: in the wings, war Edison with his motion picture machine For an'incredulous public, lifelike figures Pop literature of the 1890's Weekly translusons of Wild West' nation, and merchant princes'were revolu tionizing selling techniques. Marshal Field's department store in Chicago--the first of its kind--was the merchandising showplace of the Middle West. The mail-order houses of Montgomery Ward and Sears, Roebuck and Company were tapping the huge rural - market with their catalogs offering every thing from the latest women's styles to farm gear. And Frank W. Woolworth's five-and- dime stores were spreading, across the country. That summer in London, Queen Victoria celebrated her 60th year on the throne of England with pomp and pageantry the likes of which the world had seldom seen. Britain was at the zenith of her power and the Empire seemed destined to last forever. As to the relative power of the United States and England, most English Herbert Henry Dow in 1897 High hoDss. a tt'ocess and S200.003 men would have agreed with a Tory jour nalist who had written to the Times: "The English and not the inhabitants of the United States are the greatest power in the two Americas; and no dog of a Republic can open its mouth to bark without our good leave." But such posturing was not un mz:'m common on both sides of the Atlantic. The United States was ..^/ ?*? moving toward war with Spain. Public sentiment favoring the Cuban rebels' fight for indepen ,IA * dence was mounting, fueled in . part by phony atrocity stories trumped up by reporters for The resplence-: Liilian Russe For 'Di.~n-.rT. . ~ F-'env. ioo aooc a ; - e .: William Randolph Hearst's New York Journal and to a lesser degree by Pul itzer's New York World. When the governor of New York appealed to Speaker of the Critic Brya.n House Tom Reed to dissuade the represen 'Cross of G: ;ch tatives from voting to intervene in Cuba, To cure deceasy more-. Reed replied: "Dissuade them! The governor might as well ask me to step out in the middle of a Kansas waste and dissuade a cyclone." And war with Spain came the following year. Books on etiquette were popular, instructing the uncertain how to acquire social and business graces. But none was more popular than "Professor" Thomas E. Hill's Manual of Social and Business Forms. a perennial best-seller which, among other things, advised the reader to "never give a lady a restive horse " Furthermore, it was "the gentleman's province to assist the lady in mounting", a procedure for which Pro fessor Hill provided explicit instructions. Beards and mustaches were pop ular with the men (even Herbert Dow had a mustache for a time to make himself look older) and they sported derbies, cutaway coats with tight-fitting trousers, vests adorned with heavy watch chains, and shirts with high stiff collars. Women rustled when they walked in their floor-length dresses and petticoats of silk. They were corseted to achieve hour-glass figures, flounced, bus tled, and hobbled--with long hair piled high and covered with huge hats held in place by long hatpins. In the glitter of Broadway, none glittered brighter than the beauteous Lillian Russell (when Diamond Jim Brady stuffed her hand with negotiable bonds and offered matrimony she refused him on the grounds that she liked him too much to marry him -- presumably keeping the bonds). And another star was wasp-waisted Anna Held, whose fame rested largely on the rumor that she bathed daily in a tub full of milk. But while champagne corks popped and men snapped women's garters with frivolous frequency, the era hardly supported the title of "The Gay Nineties" beyond the lights of Broad way. Life was still too real and earnest in the mills and factories and on the farms of America. People in towns and cities were flocking to see "the most wonderful of all modern inventions"--the Edison Moving Pic ture Machine. The posters promised "views of railroad trains going full speed" and moving figures "so lifelike, so true to nature, so perfect in detail.........that the audience " can scarcely realize that what they see is only a picture and not reality." --1 Among the footnotes to the year: Bob Fitzsimmons whipped Gentleman Jim ^ Corbett for the heavyweight- boxing champ- ionship of the world, 14 rounds at Carson City. Nevada; Francis Pharcellus Church wrote an editorial in the New York Sun as- ^ suring eight-year-old Virginia O'Hanlon that <_ri "Yes, Virginia, there is a Santa Claus"; Typhoon II won the Kentucky Derby and a purse of $4,850; no one paid a federal in come tax and the public debt was a mere $1.25 billion as compared to the 1970 public debt of $370 9 billion; and music lovers heard for the first time "The Stars and Stripes Forever" by John Philip Sousa. "On The Banks of The Wabash." and something else called "You're Going Far Away: or, I'm Still Your Mother Dear." By any measure, the year 1897 which saw the beginning of The Dow Chem ical Company was a fabulous time in a fabulous era. Twice the winner of a Pulitzer Prize for jour nalism, Don Whitehead since 1956 has turned to book-length reporting, starting with The F.B.I. Story. His most recent title. Attack on A Terror, published in 1970. describes the civil-rights struggle in Mississippi Mr Whitehead is the author of The Dow Story (1963: He makes his home in in ! Concord, Tennessee 17 J MAKING IT AT DOW STG0 : i606 Some minority persons are well up the career ladder Pictured on this page are representative minority COMPUTER PROGRAMMER William M. Greene ES in Electrical Engineering, Tuskegee. Joined Dow in 1965 Designs and supervises execution of computer programs for various Dow departments. _ group persons* who have carved out successful professional or supervisory Dow careers on their individual merits. i This group of Dow employees are members of an increasingly important MAINTENANCE FOREMAN -* Hurlon J. Clark i and growing part of the Company. Dow believes that Joined Dow in 1964. Supervises 20 people in electrical maintenance service. the principal contribution it Texas Division. can make in equalizing QUARANTINE SUPERVISOR , Edward L. Mathews Sam's Technical School Joined Dow in 1952. Unit head of Quarantine Department. Indianapolis Division Responsible for pharmaceutics' after manufacture but prior to release by Dow Quality Control or Food & Drug Administration. employment opportunities is to provide an atmosphere in which good performers -- regardless of color or national background--have the opportunity to advance and the freedom to contribute :c Dow's and their PLACEMENT MANAGER Ronald S. Haughton MS in Chemistry. Iowa State. Joined Dow in 1964 Responsible for selection, placement, transfer and personnel records of professional and technical employees for the Midland Division ~v success. Dow behaves that equal opportunity goes much further than, numbers. Programs have been and are in progress for all Dow employees so that meaningfu' careers, recognition of achievement and opportunities for advancement are equally available fc' every employee. Dr. Earie E Barnes, president c~ Dow Chemical U.S.A has cut it succinctly: "We are mts'-sted in making the best use of everyone's talents " Although toe number of Dow emp!c\ees in the United States dec! -'ed during 1971. employees `-cm minority groups increased by 1 99 for a new tots c" 1.926 or 6 1 Aof the Com' eny's total U S sni piovmen: PHARMACEUTICAL CHEMIST Linneaus C. Dorman PhD in Organic Chemistry. Indiana Joined Dow in 1960 Specializes in synthesis of peptide compounds for use in pharmaceutical research Research rank. Senior Research Chemist. RAILROAD FOREMAN 4 J. D. Spears Joined Dow in 1963 Supervises employees m cleaning. ie:;airir- switclung and inspecting tank vessels for the transport of Texas Division chemicals PATENT AGENT S. Preston Jones BS m Chemistry. Hampton Wr.r, Dow since 1963 Specializes m patent procurement and counseling for ani.--.sI-health products, herbicides and insecticides . Women progress in professional, managerial careers at Dow More emphasis has been placed on opportunities for women, including better utilization of women in present functions, job enrichment to provide greater work satisfaction. and advancement to jobs o' greater responsibility In February 1 972 two outstanding career women were elected ass'stant officers of the Company. I'1 1971. women employees _ numbered 3.366 or 1 I'D Dow's total U S employment. The following page pictures a MS m Sirucimai Engineering. Illinois Joined Dow in 1969 Supervises structural design of chemical plants in Dotv Engineering c. Construction Services, Houston representative group of professional one; supervise women - who hot e tom id good caieer opp-'.ruimt'3 at Dow io COLLOID CHEMIST Bettye W. Greene PhD in Physical Chemistry, Wayne State. With Dow since 1965. Conducts fundamental research in colloid and latex chemistry. Research rank: Senior Research Chemist. - ANALYTICAL CHEMIST Lou Alice Howard BA in Chemistry. Rice. Joined Dow in 1961. Conducts special projects in infrared spectroscopy in the Texas Division. Research rank' , Senior Analytical Chemist. ? ANALYTICAL MANAGER June W. Turley PhD in Chemistry. Pennsylvania State. With Dow since 1957 Responsiblefor Midland Division Inorganic and Elemental Analysis group. -** ST000460T- [ J1 Q COST ACCOUNTANT Carol Ashley 0A r. Accounting. Michigan sts:s Joined Dow in 1967. Resccnsible for accounting supervision of firms packaging consumer prccucts for Dow. - \-=f 3 . ,, L -* i?'2 ;,i .t"'- - .ij ' -1 iv.-ti KJ- V^ - i. .ses bnc A'a. CONTROL SUPERVISOR -* Martha Dean Bacteooiogy. Pu-bue Extension !al Jc "ed Dow in t CC Supervisor in . c Control Department Incenepohs D:\ isicn S .mewses leccstory tecnmcians ,n ctuaPty cc-t-oi of bioicc cal p-cc.icts SALARY ADMINISTRATOR Lorraine Phillips Northeastern School of Commerce With Dow since 1959 Sets salary standards for Dow Chemical USA personnel covered by overtime provisions of wage-hour laws TECHNICAL LIBRARY MANAGER Dolores A. Hartman MS in Library Science. Michigan Joined Dow in 1959 Manages Dow s central technical library (staff of 1 21 and maintains liaison with technical libraries at other Dow locations _ GENERAL MANAGER'S STAFF Shirley T. Van Meter Joined Dow in 1 94S Staff assistant to the Texas Division general manager Handles special assignments, supervises division's guest facilities, coordinates job-opport uni tieslor-women program Jeraldine B. Smith JD. Houston iLaw) Joined Dow in 1957 Responsiblefor litigation administration, real estate and equipment leases, legal counselor to Credit and Traffic Departments ASSISTANT OFFICER Lois J. Hoerlein Joined Dev. in 1955 Administrative assistant to the corporate secretary Elected an assistant secretory of the Ir. Company in Febiuary 1972 t : .J 1 r ASSISTANT OFFICER Gertrude Welker Joined Dow in 1952 Secretary to die President. Elected assistant secretary of the Company in Febi uary 1 972 <9 r organic synthesist JoAnn Gilpin -.a- tv52 Spocia cec " s\--c'-sis of v/. RADIOISOTOPE SPECIALIST -s> Irene Takahashi PhD in Choivsti y. Wash in chin 'Seattle! With Dow since 1 J53 Applies radiotracers to a vanvty c; Rvv.'rirch rtm? Sciiioi n-c.f atch Ciicinii't 19 Mf-WiVA- M ajfrm 2: HAVING YOUR CAKE AND EATING IT Volume chemical production can exist side by side with a clean environment WASTE TREATMENT IS EFFECTIVE ... Cooling towers in Dow's Midland. Michigan. COrT)_ reuse water for cooling purposes over and over reducing plant's fresh-water requirements and am of heated water returned to Tittabawassee RiVet Current S7.2 million project will add 28 towers for a new total of 39. H- ? c- Some of the comments made during and since Earth Day 1 970 have suggested that technology needs to be stopped in its tracks --or even rolled back to the level prevailing in some supposedly more halcyon era --if environmental problems are to be solved. That the problems exist is manifest. That they can be resolved without suffering the massive dislocations of turning back the clock is becoming more and more apparent. Dow, which built its first waste-treatment facility (a holding pond) in the Twenties, is successfully abating pollution problems in its operations. By its own evaluation, it is fairly clean now and expects to be a lot cleaner in another two years. Photographs on these pages illustrate the two broad lines of activity-- waste treatment (for environmentally safe disposal) and waste prevention (by purifying raw materials and recycling byproducts). The latter method is obviously the more rewarding, as it converts potential wastes into salable products and turns costs into break-even or profit opportunities. Settling ponds remove undissolved solids and light floating materials from phenolic wastes Next rock trickling filters (background) convert about 95%ofihphenol to carbon dioxide and water. Over-all, Dow expects to control pollution at no net cost. In a project due to be completed in late 1973 in Dow's Texas Division, crude ethylene and propylene will b.e purified at their manufacturing source, thus eliminating waste problems in "downstream" production. The project also will increase production yields, providing a reasonable return on the SI 3.8 million investment. However, Dow doesn't expect every environmental-improvement project to produce a similar result In some instances, capital costs i are going to be increased substantially without an offsetting gain in I return; then, the utility of the product will have to justify the resulting higher selling prices or the plant cannot be built at all. Sometimes not even the most rigorous efforts can bring an older plant up to the desired standard. Such is the case with the mercurycell chlorine/caustic facility of Dow Chemical of Canada. Limited, at Aeration basins further treat phenolic wastes (to ISJ3 down the remaining 5%) as well as other nmanicst--i Sarnia. Ontario. Although mercury losses to the St. Clair River have been cut to less than a tablespoon per day. well within government requirements. Dow's goal of total elimination appears impossible with the mercury-cell process. It therefore will be replaced with a facility based on the diaphragm type of cell, which uses no mercury Control of air pollution, particularly from power-house stacks, offers mixed opportunities. More and more coal-fired boilers are being converted to low-sulfur oils or natural gas at Dow's plants in Midland and Ludington. Michigan. But even cleaner, as well as more economical, is nuclear power which is why Dow's Midland complex has contracted to purchase all or its requirements for electric power and steam from the projected Consumers Power Company Midland nuclear plant. Challenge and exhortation up and down the line can work wonders. An example is a contest among 14 Dow synthetic latex plants around the worid to determine which one could increase its average yield the Trickling filter tower containing Surfpsc o astic 1 biological oxidation media (in Dow's Bay C.ty. Michigan, petrochemical plant) performs same fund . most over a five-year period The results; yields were increased as rock trickling filter but requires less la'-d area ; from an original high of 94% to a remarkable 93% while simultaneously wastes were reduced by 70%. Recent events have wrought many changes in Dow's methods of operating plants and doing business. Supervisors now are rated for environmental performance, along with traditional factors. And suffusing the entire effort is the basic philosophy that tine "environmental imperative" is a positive opportunity, not a negative burden. Many solutions devised by Dow to solve its own pollution problems not o:ny reduce internal costs but can be marketed to others Dow Environmental Control Systems is 5 substantial business contributing to operating income With the ineversible push for a c.eaner won;:, .t can only Ire a growth business 20 C0rns.i. r, nioL.. rer folding ponds are additional safeguards against pollution jccidents. This'one (capacity: one million gallons! in Midland cornp!ex keeps effluent streams from emptying into river when contaminants in outflow trip a monitor, shutting a control gate. BUT THE REAL SOLUTION IS WASTE PREVENTION Dow synthetic latex plant near Dalton. Georgia, uses more than a million gallons of water per day and recycles practically all of it. Coagulated latex particles settle out in one of four primary ponds (foreground) Clarified water then flows to a large reservoir' (background), from which it is pumped back into the plant. Scrubbers and filters control air pollution. These vent stacks atop a manufacturing plant are among 4.522 in Midland complex, all of which have been checked for air-pollution potentials and equipped with control devices as needed. When this new chlorine facility in the Texas Division begins full production, several new systems, including a recycling process, will prevent water and air pollution. */ .J ^ Ecology vans, manned around the clock, seven days a week, by Jf four environmental cuahty control specialists, prowl the Midland } complex looking fcr trouble spots Job includes taking periodic ? samples of river water STOOD*609 1 From Sig. Pagam's vacation 'souvenir' came THE LITTLE BUGS OF DR. SENS! In 1971 Hermes Pegam reenacts the collection cf the now {amous St. Raphael sell sample of 1957 in a pine forest cn the French Riviera. Samc.e contained the microorganisms from which. Rifadin antibiotic was derived. ' - Dr. rows ,ov. ir. its _o!r o-rga pro tv ~r vs- snri ..pv.-n; In the Lepent Research: Laboratories ;r. V. ano the St. Raoitael same e is prepc'sr for screening a.:-g with; ctne:; from around :h- . oriti Toteg 2.000 were pre teased. When incubated a grewd ;;> wii;,n'. micro " .h pro :r sdi.s pi'vitioo iro to wi tori i are t-xoro - ~o t w t.Owii' IV 0 ... i ST-OOOA6IO .oe cho.g..-d i m It was a happy holiday, there in St. Raphael, midway between St. Tropez (the town Brigitte Bardot made famous) and elegant Cannes. Still, relaxed in the Riviera splendor of 1957, Hermes Pagani was ever the team man. Before turning homeward to Milano, he thoughtfully, on his own initiative, dug up a few square inches of French soil and put them in a pill bottle. The bottle proved to be loaded with a kind of gold. Signor Pagani is a microbiologist with Lepetit Research Laboratories" under Professor Piero Sensi. Back in his laboratory, where he is in charge of fermenting antibiotic cultures, he was soon to see his soil sample again. Now inserted into Lepetit's soil-screening program, it joined some 2,000 other samples submitted by Lepetit affiliates around the world and examined during a five-year period starting in 1952. Ever since the early days of penicillin, .pharmaceutical companies have been sorting out some of the millions of microorganisms contained in soils, looking for new anti-bacterial agents. In general, their search has been addressed to such types as the Streptomycetes, which have proved capable of producing antibiotics. Of the 18,000 Streptomycetes strains isolated by the Lepetit researchers, only 400 were adjudged worthy of further investigation. The most promising, Streptomycetes mediterranei, was found in the soil from Sig. Pagani's pill bottle. A happy holiday indeed! During normal growth, the strain produces a mixture of five antibiotics. Realizing it had in hand a whole new antibiotic group, Lepetit researchers assigned them the generic name of rifamycin. During the next five years, it was established that only one, rifamycin B, could be purified. As it turned out, rifamycin B itself is inactive against bacteria, but as it degrades spontaneously in watery solutions it produces a very active product, which was given the name rifamycin SV. In clinical research, SV was active against bacterial infections, especially those leading to pulmonary tuberculosis. The trouble was that it could be administered only by injection, and it had a restricted distribution within the body. At this point. Professor Sensi and his staff embarked on a large program of chemical modification, lasting three years, to find a derivative CO --i CCD that could be taken orally and achieve a better distribution. Of more than 500 derivatives synthesized and tested, one was found that met these goals. Given the names rifampicin and rifampin, it also exceeded the parent 30 substance in activity. In extensive clinical trials in many countries, rifampin demonstrated excellent results in treating pulmonary tuberculosis, in combination with other anti-tuberculous drugs. Medication programs with rifampin are actuary lifesaving, particularly in cases where the disease has become resistant to other treatment. Another potential advantage is a saving in patient hospital costs. Under the trademark Rifadin, rifampin first became generally available to physicians in parts of Europe and Latin America in 1963. Since then, its use has spread to all parts of the world. During 1971, it was registered in the United States r ; - 1 Indicat ions a re that the trail leading from St. Raphael is far from ended. Medical researchers are studying rifampin derivatives for their effect on viral ( \\ diseases, leukemia, sarcoma, trachoma and leprosy. Chemists at Lepetit under Dr. Sensi's direction are hard at work synthesizing new derivatives. It could be that the rifampin story is only beginning. Sig. Pagani's happy holiday may turn out to have been happier still. ' '> INSECTICIDES WITH A DEFTER TOUCH Two Dow products move in where DDT no longer treads By ths dawn's -a" . ant. when the air is still, a U.S. Forest Service plane sorays Zectran insecticide on budworm infested spruce m Idaho s Pez'rerce Forest. Only a sixth of a pound per acre of Zectran was required to check tire budworm epidemic, avoiding undue carnage to the insect's natural enemies. Vapor plumes are largely deodorized kerosene, used as a carrier fen the insecticide. From ihe for it. It v. species:: made :t c against a destroy;' to solve a of large-s success: of env we grevic ..s of envy for cow. Dursoaras cow. 7 severe follow ' a Cat c'i f re v- v. Service : cment of its hopeful introduction in 1 943. DDT seemed to have everything go ng = no: only effective against a multitude of troublesome insect cheap, too. so that even poorer nations couicl afford it. Among the factors that yap was its persistence: one or two applications might be effective Anopheles mosquito, the gypsy moth, or some other disease carrying or crop .nsec: for an entire year. Farmers and public health officers turned to DDT w ao of problems, and production soared, bringing the economies -. e manufacture. : as every reader of periodicals knows, some of the very quant es that made DDT a 'ng Woric! War II and the 20 year aftermath have led to its dec- ne in tins age sente :sm. In 1971. the World Health Organization reported that during the .e-' '.mars DDT use had dropped 50w (to 250.000 tons annua .yi because yrta fears. v. has introduced two products that replace DDT m certain uses --Zectran insect': ; :-,r spruce budworm ione of tine most devastating of f west r-.-sts- -nd Sr at o oe !or the corn re of mosq: nto ...irvae - md saw i i v: .wo--iso a navances z:ran. originally introduced as a lawn and garden product. ws eft the market for `S c-caase of manufacturing problems. whs 11 haw now f -.-a i savwi. in I 971. : .w' veers oi tests hv th-- United Stat-.w Forest S-ervv e. tiw pwiu,! sp'uce hudw-orm conhw hv the Environmeni. r Promotion Agvy. Tin-; Forest naw-r" z-wi the event a? a want step ?owa:h Iwawi : ,. in;:1' .- w- -e t:a-.- on --f CD CD CD CD N) f';. I. I r I * I defoliated thus spruce in Aroostook County. Maine, another area Zectran is teaming with Nature to preserve forest values Estimated 5.7 acres of U.S. forests have been noticeably damaged by these voracious i insect? t Prior to spraying Forest Service personne dip midcrovvn samp'es from outer 1 5 inches of trees. Samples were identified, bagged and sen: to field laboratory for spruce-budvvorm counts. I 9 U' 0 0 inrauders without clamaae to the environment." Du-.r j the summer of 1 971. the Forest Service used Zectran against the spruce buoworiTi m tide Pacific Northwest and in Maine in what entomologists ca'.i "integrated contro co programs." These require maximum use of a harmful insect's natural predators and parasitic --i enemies. In me areas selected for treatment, the budworm had been epidem. c for five years. Bemm the spraying, entomologists made actual counts of budworm populations from, tips c: branches cut from selected trees. The objective was to determine as close vas PmsiiTe ir- cme tor optimum contro! of the insects. Information from the sampling v. as com.;: n.ated with special weather forecasts. Zectran, which is 20 to 2 5 times more cm.', erf a', aga nst the budworm t han DDT. was sprayed aerially at tire rate of ; 5 one bundreams m a pound per acre. At this exceedingly low rate, the insecticide mas mgh \ se active, killing man\' budworms (complete kill was not th.e cigeccve) but ie insect life to a hicih deciree the 1 97 i sprayings, studies had demonstrated that Zectran dews no; secure . urn caw-mcent, in water or m animal tissues and is nonhuzumh .s to Dursodn insecticide ha a similar propensity for rapid decomposiiim ad/antage r mosquito control \ mk. Because of their shorter active ves, im n--;d to i't c wo somewhat m re often than DDT to ke-p a post u; ider ccm environ'" w tat cost apoears tr one- that the United Smtes and iv. my otb ms-1T ronn cl! TARGET FOR TONIGHT After years of planning and building a chemical plant comes the time for pay-off "I can't think of any reason not to do it now." It was December 16, 1971, and Robert L. Walzel, Unit III manager of Dow's Oyster Creek Division, had just made one of the most important decisions of his Dow career. For "doing it now" meant triggering a chain of events that would: Bring the world's largest phenol plant (400 million pounds per year capacity) on stream. IVIake Dow the world's largest phenol producer. Put Dow in the acetone business in a big way since 240 million pounds per year of this popular solvent would be generated as a co-product of the phenol-making process. Phenol is a major industrial chemical consumed in enormous quantities jn making such products as phenol-formaldehyde plastic resins, weed killers, adhesives and aspirin. Dow pioneered a phenol process based on chlorbenzol, hydrochloric acid and caustic soda in 1922. The new plant, however, was designed for a process Dow had never used before--the oxidation of cumene, a basic building-block chemical. Unit III, built at a cost of more than $20 million, sprawls over an area equivalent to six square city blocks on the Gulf near Freeport, Texas. It is a huge collection of columns, towers, tanks and piping--a giant amid giants (Oyster Creek Unit I is one of the world's largest vinyl chloride plants and Unit II is one of the world's largest chlorine-caustic facilities). More than three years of planning, designing, construction, testing and adjusting had been required to bring Unit III to its present state. Although a modern chemical plant is designed for continuous operation, startup involves more than pushing a button at one end and immediately drawing off finished product from the other. The miles of piping must be filled, raw materials brought up to the proper temperature and pressure and then reacted, semi-finished product purified. The cumene oxidation process for phenol, while requiring only two chemical reactions, actually encompasses five different steps. Starting up a chemical plant is no ordinary event, and the 52-man crew that started up Unit III was no ordinary crew. Aside from 12 production veterans transferred from Dow's Texas Division (a few miles away) and Units I and II, they were comparable to Navy "boots" fresh out of boot camp. Former teachers, students, returning Vietnam veterans, factory workers and ranch hands, they had not seen the inside of a chemical plant prior to the previous summer. But after six months of classroom and on-the-job training, they were confident and enthusiastic, a tribute to the Oyster Creek Division's "people philosophy." The division feels that people have to get satisfaction out of their work and that one way to do this is to give them as much responsibility as they can handle. For men craving responsibility, starting up Unit III was a kingsized opportunity. The situation truly called for individuals who could think for themselves and solve problems never before encountered. Despite months of preparation, none of a new chemical plant's equipment or controls has been tested in production-scale operation. The crew is uncertain how the various instruments will react to harness the high temperatures and pressures and huge volumes associated with the process. It's something like piloting a newly developed aircraft to get the feel of how it controls, accelerates and maneuvers under different conditions. When the unit started up, each step in the reaction progressed "as planned." The critical event was actually anti-climactic. The long months of designing, computing, experimenting and training had paid off. It was now December 18, approximately 48 hours from startup. After the plant had run continuously for more than a day, Walzel was satisfied that it was operable. He then ordered operations shut down for a routine debugging of units that .are best serviced with the plant "off stream." With the debugging completed, the plant was again brought on stream. The veterans and the boots (not really boots any longer) settled down to the job of continuously operating, maintaining and improving the world's largest phenol plant. 26 y ... , it ! i* i .'r-r V i 1. Just prior to startup, Oyster Creek Division general manager Louis Shelton and Unit III manager Robert Walzel inspect the vast phenol facility. 2. Intense concentration and activity build up in the control room as the plant comes on stream. The room is the facility's nerve center from which ail steps of the production process 3. Highly reactive cumene hydroperoxide is concentrated in this tank just prior to being ^ "split" into phenol and acetone. 4. Technical supervisor Ken Huff makes a finetune adjustment to one of the controls as a massive chemical reaction takes place in equipment far removed. 5. Training supervisor Linton Lipscomb makes a routine check of emergency breathing equipment. Personal safety practices and protective equipment have a high priority in Unit ill's operations. 27 /\ oo -- CD o CD cn CONSOLIDATED BALANCE SHEET The Dow Chemical Company and Subsidiary Companies ASSETS December 31 UJ ~ 1971 1970 (Restated-Note A) Current Assets Cash................................................................................................................................... .................. Marketable securities and interest-bearing deposits (at cost --approximately market)............................................................................ .................. Accounts and notes receivable: Trade, less allowance for doubtful accounts (1971, $10,749,008; 1970. $11,470,611)........................................................ .................. Miscellaneous.............................................................................................................. .................. Deferred income taxes.................................................................................................. .................. Inventories --at lower of cost or market: Finished and in process............................................................................................. .................. Materials and supplies.............................................................................................. .................. $ 40.501,724 65,612,213 368,435.898 125,829.174 10.091.608 279,732,535 115.727,122 1,005,930,274 $ 30,280,740 48,362,673 3491640,162 88.968,486 6,361,063 256.734.95E 111,504,818 891.852.897 Investments Capital stock --at cost plus equity in accumulated earnings (less reserves-1971, $1,508,662: 1970, $2.842.100)(Note B): Wholly owned Swiss bank................................................................................... .................. Associated companies (50% owned)................................................................. .................. Other.......................................................................................................................... .................. Sundry --at cost (less reserves -- 1971, $1,947,736: 1970, $2.742,904)................................................................. .................. Noncurrent receivables (less reserves -- 1971, $2,313,328; 1970, $2,300,000)..... ......................................................... .................. 38,655,829 177,489,543 30,984.228 50,917,952 88,302,329 3S6.349.881 31.819,987 143.220,495 31,919.217 49,830.019 104,098,219 365.887,937 Plant Properties (Note D) Cos;................................................................................................................................... .................. Less --Accumulated depreciation.............................................................................. .................. 2,722,899,183 1,158,792,049 1,564,107,134 Goodwill (Note E)............................................................................................................ .................. 77,323,480 2.524,312.720 1,036.124,4_85 1,438 188.235 72.195.649 Deferred Charges and Other Assets........................................................................ 45,096,622 35.653.42S TOTAL................................................................................................ .................. $3,078,807,391 $2.804.778,2J? Str't' .4i: ~ Pnnoip/es and P'otas to FinancialStatements vj Cd r z n c ~ r re>c cn Iff a (N CM </> iornsoi cKs/ cc cs </> cc f<v/>; 62 C3 64 65 66 67 66 69 70 71 Before extraoidinaiy items FER SHARE- oro Co<M? </> /) in om o cG> 62 63 64 65 66 67 68 69 70 71 liabilities ` Current Liabilities Notes payable................................................... Long-term debt due within one year.......... Accounts payable....................................... United States and foreign taxes on income Accrued and other current liabilities.......... Long-Term Debt (Note F) Other Liabilities and Reserves Minority interests in subsidiary companies Deferred employee benefits........................... Deferred investment grants........................... Deferred income taxes.................................... Loss on foreign investments.......................... PAID PER SHARE <J) c tft </> m to 62 63 64 65 66 67 68 69 7C 71 December 31 1971 1970 (Restated--Note A) $ 368.264.346 35.180.686 180.513.967 56.431,754 151.118.123 791.508.876 S 229.255.553 61,980.998 150.566.715 56.770.254 138.082.808 636.656.328 1.010.136.133 969.844.553 34.665.997 26,262.248 8.248,031 5.950.490 . 5.000,000 80.126.766 ' 39.932.009 19.168.418 1.885.000 4.764,558 5,000.000 70,749.985 2 I970001S : Stockholders' Equity (Note G) Common stock (1971 -- issued. 47,81 9.034 shares). Capital surplus..:............................................................... Retained earnings............................................................ Less --Treasury stock at cost (1971 --2,443.210 shares) TOTAL. S;`g Account::- - F.-nc. ::lcs one! Notes to Financial Statements 239.095.170 520.935.018 553.448.631 1.313,478.819 158,089.120 585.046.077 479,779.007 1,222,914.204 116.443.203 95.3S5.S53 1.197.035.616 1,127.527.351 S3.078.807.391 $2,804,778,217 1 CONSOLIDATED STATEMENT OF INCOME The Dow Chemical Company and Subsidiary Companies Products and Services Year Ended December 31 i 1971 1970 (Reslnted-\:ote 4| ~ j j l Net sales........................................................................................................................ .................... $2,052,711,344 Operating costs and expenses: Cost of sales.............................................................................................................. ................... Selling and administrative...................................................................... .............. .................... 1.517.253.844 250.706.483 1,767.960.327 Products and services operating income.......................................................... ................... 284.751.017 $1,91 1,105,081 1.417.767.015 233.714.252 1.651.481.267 259,623.814 C \ E r Non-Products and Services Investment and financial: Profit on investment turnover.............................. Income from sundry investments....................... Equity in earnings of Swiss banking subsidiary Administrative expenses....................................... Equity in earnings of associated companies and minority investments exceeding 20% (Note B) Interest expense--net ............................................... Sundry income --net ................................................... Non-products and services income (loss)......... 4.442.979 3.052.359 2.777.853 (1,767,840) 8.505.351 18.923.896 (78.516.402) 16.456.403 (34.630.752) 10.658.493 3.236.274 2.331.584 (1.974.248) 14.252 103 IJ It I 6.847. 019 (73.521. 590) 14.850. 983 (37.571 485) GJ 9.4-0 00IS Income Before Provision for Taxes on Income Provision for Taxes on Income (Note J)........... Income Before Minority Interests............. Minority Interests' Share in Income ............... Income Before Extraordinary Items................... Extraordinary Items --Net of Tax (Note Cl Net Income. . .. ............................... 250.120.265 91.000.000 222.052 .329 88.100 .000 159.120.265 ____ 4.726,324 133.952 .329 3.977 .570 154.323.441 235.688 129.97^ .659 (27.831 557! S 154.729.129 S 102.143 '02 Earnings per Share inccm.e be? etc extraorciitieiy items Extraordinary items --net of tax.,.. Net income S3 CO 01 S3 41 S2.S7 (.61 S2.26 CONSOLIDATED STATEMENT OF CAPITAL SURPLUS The Dow Chemical Company and Subsidiary Companies Balance at Beginning of the Year........................................................ Add: Excess of selling or market price over par value of common stock issued to employees...................................... Excess of face value of debentures over par value of common stock issued on conversion..................................... Deduct: Retirement of treasury shares and transactions related to acquisition of subsidiaries..................................... Transfer to common stock relative to three-for-two stock split Balance at End of the Year...................................................... ........... Year Ended December 31 1971 1970 S585.046.077 S574,699.429 15,189.085 313,951 600,549,113 79,614.095 S520,935.018 10.671,487 86.145 585.457.061 410,984 S585.046.077 CONSOLIDATED STATEMENT OF RETAINED EARNINGS The Dow Chemical Company and Subsidiary Companies Balance at Beginning of the Year (as previously reported) ............. Add -- Equity in undistributed earnings since dates of acquisition of associated companies and minority investments exceecmg 20%. Balance at Beginning of the Year (as adjusted) .................................. Add (Deduct)' Net income for the year............................................................................ Adjustments related to consolidation of subsidiaries..................... Deduct. Cash dividends.......................................................................................... Retirement of treasury shares................................................................ Balance at End of the Year......................................................................... See Accounting Principles and Notes to Financial Statements Yoai Ended Decombei 31 1971 1970 r0 S454.802.305 24,976.702- S430.696.30l~1 CD 26.220.76^ 479.779.007 154,729.129 131.943) 634,476.193 81.027.562 456.91 7.06SP" CD .-____ 102.143.10^ 1 S3.308 559.2-8.478 7SA99.230 970.241 S553.448.631 S479.779.007 OPINION OF INDEPENDENT PUBLIC ACCOUNTANTS ' 7-3 DOW CHEMICAL COMPANY '*' - :\ tj -oxo:".!! *.jc i (lie consolidated I Kiln net? sheet of The Dow On nnc:il Coni pany and i e s s w - o k war y a. cm names as of Dir (a av.: : 3 '. ! '-`7 1 ana ;ho : elated consolidated' statements of income, i et mm *d minimus, capital sm plus and c.han jes m i manual no mi ion ; [|v \ c..:- durn srtied Our examination was made in acco: nance with ` h mm al iy accepted audi l me: st andm du a nr! accor cimijly m.duce a -''Ci'. tests w the account i :in r ecor ds and such Oliver and it me; ;(u m lures as we considered necessary m the mi cum.si a mews In cm opinion, such financial statements or esem fairly i he I man ci a I position o: the com; urnm. at December 31. 1971 an;: ` i esuds then cmei at ions and the changes m then financial ; mil ion for the year thm 11 .mueu m uc m m "m t v v. ith. pence ally vc.mej w a-'hunt;r.u [a mnples applied on a basis consistent .will ;hat ul die piaci^duv: yea; as nutatac. as explained m Nop- % A (Millions of Dollars) CtCCC5 CN CC c b : S'- r- ct. 62 63 64 65 66 67 68 69 70 71 INCOME DOLLAR Raw suatctials. supplies & services 50 1 c VSdges. salaries & indirect benefits 25.CC Depreciation 10.2 c Taxes 7.5c Cash dividends 3 SC Earnings for the vest invested m the business 3.4 c CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION The Dow Chemical Company and Subsidiary Companies Source of Working Capital Net income before extraordinary items..................................................................... Charges (credits) to income not involving working capital: Depreciation................................................................................................................ Equity in income --non-consolidated companies, less dividends received Minority interest in income...................................................................................... Other --net.................................................................................................................... Proceeds from sale of investments, less gains reflected in net income............ Provided from operations.............................................................................. Extraordinary items....................................................................................................... Issuance of debentures................................................................................................ Sale of common stock to employees......................................................................... Increase in other liabilities and reserves.................................................................. Disposal of plant property and sundry...................................................................... Use of Working Capital New plant and equipment....................................................................... Cash dividends......................................................................................... Purchase of treasury stock.................................................................... Decrease (increase) in revolving credit and other long-term debt Noncurrent investments........................................................................ increase in deferred charges and other outlays............................... Acquisitions of subsidiaries and purchase of minority interests: Working capital..................................................................................... Goodwill.................................................................................................. Minority interests................................................................................. Other -- net.............................................................................................. Increase (Decrease) in Working Capital Increase (Decrease) in Current Assets Cash and marketable securities............. Receivables................................................. Deferred taxes .......................................... In', entories.................................................. Decrease (Increase) in Current Liabilities Notes payable and current portion of long-term debt Accounts payable............................................................... Income taxes and accruals.................. :......................... Increase (Decrease) in Working Capital SssAxotmuny Principles and Notes w Finenci.-! Sixemonts PRICE INDEX iU S r lO c o2 -- Sa' C^ Nel Sell'ng Prices O TT e> 2Ci 0mw0 ,,0"301 CC s 62 63 64 65 66 67 68 69 7c { J 1;f i ( i t < Year Ended December 31 ______ Hn thousands! 1971 1970 ___________________ (Restated-Note A] S 154,393 218.755 (14.611) 4,727 11.954 10.406 385.624 9.317 26.000 16.538 8.263 5.312 451.054 364.600 81,023 21,056 (1 1.482) 10.736 10.955 155 5.127 9.988 (334) 491.829 S (40.775) S 129,975 [ 207.744 i (1.051) 3.978 11.216 13.094 f } 1 } 364.956 j 17.131 274.000... ' 10.25800 1 4.750--4 f 4,898,^--, 675.993CD J clj :j CD , 348,09^0 , 78.49^--j ' 1 5.969 ICS.074 ! 22.157 4.660 it 2.178 i 9.456 3.699 592.791 S 83,202 ! ( 1 S 27.471 55.656 3.730 27,220 (112.203) (29.948) (12.696) s (40,775) S (54,769! 12,531 2.442 79.1 71 63.130 (10.02D 10 282) ACCOUNTING principles Consolidation The assets, liabilities, revenues and expenses of 3|| significant subsidiaries, except for a wholly owned Swiss bank, are included in the accompanying consolidated financial statements. Because of the nature of its operations, the accounts of the Bank are not consolidated. However, its earnings are included in con solidated net income currently under the equity method of accounting. Commencing in 1971, the Company adopted the practice of carrying on the equity basis its investments in companies which are 20?o-50% owned. This means that the investments are adjusted to reflect Dow's share of the companies' earnings or losses which are included in consolidated net income. Dividends received are treated as a reduction of the investment. The cumula tive equity in net income of such companies to January 1, 1971 was recorded as a credit to retained earnings. The effect of the change is shown in Note B. Other investments are stated at cost less applicable reserves. Translation of Foreign Currencies Property in foreign coun tries is translated into United States dollars at the exchange rates which prevailed at the dates the assets were acquired. All other assets and liabilities are translated generally at current rates of exchange. Revenues and expenses are translated at the average exenange rates for the year, except that depreciation expense is adjusted to reflect the historical rate. Wherever available, the parities established by the International Monetary Fund are used as tiie current rate. All translation gains or losses attributable to currencies of developing countries (principally Latin America) are credited or charged to income currently. In developed countries, gains or losses relating to the translation of long-term debt are deferred over the life of the debt; the amount deferred is adjusted for net losses or gains arising from the translation of assets and other liabilities. Inventories Finished materials and work in process are stated at standaid costs, which approximate the current production costs, or market if that is lower. Raw materials and supplies are stated a; cost. Plant Properties and Depreciation Depreciation is computed over the estimated service lives of depreciable assets using the hachmng balance method in the United States and Canada In enter countries, the straight line method is generally used. Expenditures lor renewals and betterments are capitalized, and maintenance and repairs have been charged to income. Generally, assets that are fully depreciated are eliminated Ironi property and the reserve for depreciation at the end of each year, although the property may be still in use. In the case of dis posals. the assets and related reserves are removed from the accounts and the net amount, less proceeds from disposal, is charged or credited to income. Goodwill The excess of the cost of investments in consolidated subsidiaries over equity in their net assets at dates of acquisition is carried as goodwill. Any goodwill arising after October 31, 1970 is amortized over 40 years. Goodwill arising prior to that date is related to investments which, in the opinion of manage ment, have appreciated in value, and no amortization is being - - provided. OO Retirement Plans The Company and certain subsidiaries havff^o plans to provide retirement benefits for eligible employees. ThF3 policy is to accrue and fund pension cost as computed by aft--' actuary. cn Investment Turnover The profit or loss resulting from the dis1^ posal of assets held for investment and resale is segregated in the statement of income as investment turnover. Taxes on Income and Investment Credits The companies com pute and record income taxes currently payable based upon their determination of taxable income which may be different front pre tax accounting income. These differences may arise from record ing in pretax accounting income transactions which enter into the determination of taxable income in another period. The tax effect of these timing differences is recognized by adjustment currently to the provision for taxes. No provision has been made for income taxes on the unremitted earnings of subsidiary companies, except as required under United States income tax laws. Either these earnings are considered to be permanently invested or the applicable tax would not be material. Laws governing the determination of United States ana certain foreign income taxes provide for investment credits or allowances which are deductible generally upon completion of qualified facili ties. Such credits are reflected as a reduction of income tax ex pense on the flow-through basis in the year in which they are deductible. In addition to tax credits, certain foreign countries provide investment incentives in the form of tax-free grants which offset development and startup expenses nf new facilities to which they relate. Excess, if any. of grants earned over expenses incurred will be amortized over the life of the facilities. Flesearch ond Development A!! research ami dsvs.cpment costs are charged to income as inclined. NOTES TO FINANCIAL STATEMENTS A. Restatement of Prior Years The financial statements as published for 1970 have been restated to give effect to the change in 1971 to the equity method of accounting for investments. Earnings per share have been restated also to recognize the three-for-two stock split as of July 1, 1971. Certain other items for 1970 have been reclassified for com parative purposes to conform to 1971 presentation. B. Equity in. Earnings of Associated and Other Companies The effect on income of the change to the equity method of account ing for investments, as described in Accounting Principles, for 1971 and 1970 is shown below: (In millions) 19711970 Equity in income (loss): Associated companies (505o owned)............ Ownership exceeding 20 % but less than 50 5c........ .'................................ $18.8 .1 18.9 $8.5 (1.7) ~6il Less: Dividends received......................................... Intercompany profit....................................... Net increase (decrease) m income before extraordinary items............................. 7.7 $11.2 8.1 1.0 $(2.3) Per share.......................................................... S 25 Si.05) As a result of the change to the equity method of accounting, retained earnings was credited with $24,976,702 which at December 31, 1970 represented equity in the undistributed net income since dates of acquisition of 20 To -50 PL owned companies. The carrying value of the investments in such companies approxi mates the Company's equity in their net assets. C. Extraordinary Items A summary of significant extraordinary items of income and expense, net of the related income tax is shown below: (In millions) 1971 1970 Gam on disposition of subsidiary and associated companies................................... Gain (lossi on Phrix-Werke A.G. investment ..................................................... Plants and projects abandoned............................ Equity in extraordinary items of 20%-50%.owned companies-- net.................. Oilier ................................... ........................ Net income (expense), alter tax...................... S57 2.5 (9 7) 3.4 .1 6: S .3 S 2.2 (31.1) 11 $(27.8) The Company sold its investment in the capital stock o; a small subsidiary in December 1971 at a profit of S7.81 5.126 before income-tax reduction of $2,113,482. In 1970, the investment in Pitrix was considered worthless and income was charged with $31,073,000 representing the full cost, less estimated income tax reduction of $12,294,000. The Com pany sold all shares of tins stock in 1971 for $3,665,521 which resulted in a profit of $2,529,210 after income tax provision During 1971, the Company announced a program for phasing out its present chlor-alkali facility in Sarnia, Ontario and replac ing it with a process which does not use mercury. Accordingly income for 1971 was charged with $9,008,600 representing the cost of the plant, less related income tax reduction of $4,670,238. Several incomplete capital projects which were abandoned durinc the year account for the remainder of the 1971 loss. [ D. Plant Properties Properties and accumulated depreciation at December 31, 1971 were: (In thousands) Accumulated ClassificationsCostDepreciation [ } j Land.................................................. ..... Land 8. waterway improvements......... Buildings............................................ Machinery & other equipment............. ..... Wells 8 brine systems....................... Furniture 8 fixtures........................... Other................................................. Construction in progress.................... $ 52,848 58,907 297,982 1,884,504 37,829 27,977 20,271 342,581 $ 24.672 128.634 956.880 22,538 15,270 10,798 Total......................................... ..... S2.722.899 $1,158,792 E. Goodwill The amortization of goodwill acquired alter Octo ber 31, 1970, as required by recently promulgated accounting rules, was not material in 1971. There was no amortization pro i cri vided in 1970. --i F. Long-Term Debt and Available Credit Facilities Details of long-term debt were. CD: CD,' Promissory notes: 4.5%, final maturity 1990 ................. 5.0%. final maturity 1991 ................ Debentures' 4.35 %, final maturity 19S8............... 6.70%, final maturity 1298............... 7.75%, final maturity 1999.............. 8.875%. final maturity 2000 ............ 8.90%. final maturity 2000............. Debentures, subordinate convertible, 3 % due 1932 (1971 --22.324 common shares reserved).............................. Note payable under revolving credit agreement, due 1975 (total avail able facilities S11 0.000.CG0)" ......... Other (various rates and maturities) Foieign cunency loans .......... . .. Dollar leans...................................... (In thousands) December 31 1971 1970 f3, ^1 f-O l 110,000 SI 15.COO 92,000 95.000 75,928 100.000 100.000 150 000 150,000 79.010 100.000 100,000 142.000 132.000 728 1.085 30.000 149.816 51,664 40 000 11 7,765 45,931, Total........................................ SI, 010,136 S962.S45 In addition to the SSO million o: unused credit under tin: agreement, there is an auditions) S225 million ol ere:..: available under a ievolving ctodil agreement v.iib United Stale: banks. The Comeany also bed a i 0 lullinn Deutsche mari< sucemenl .Min j grot.;: m,i;c; German sinks which is eimcisshle ;!iron-.;li 1974 J \ i \ I sion. The promissory notes and debentures are payable generally At December 31, 1971, there were 468,230 shares available for 3sing ;n annual installments. grant. The Plan also extended to May 1979 the previous authority Pile- Installments (stated in millions) due on long-term debt in the for granting dividend units. n2iy. \ fjve years after 1971 are: 1972. $35.2; 1973, $38.7; 1974, Hie 545.0; 1975, $76.5; 1976, $41,1. ?38. In May 1971, the Company made an offering of common stock to its employees at $57.00 a share, payable generally through payroll deductions. At December 31, 1971, there were unfilled 'ring g. Stockholders' Equity At December 31, 1971. authorized capital stock consisted of 100,000,000 common shares and ion 1 25.000,000 preferred shares of $5 par and $1 par per share, respectively. ncii The changes in the number and amount of issued shares of 'ion common stock during 1971 were: subscriptions for 194,015 shares which may be cancelled at the option of the employee. Partial payments on these subscriptions aggregating $7,030,000 are included in current liabilities In computing earnings per share, no adjustment was made for common shares issuable under stock purchase and option plans or upon conversion of 3% debentures because there would be no material dilutive effect. :72 :34 Issued January 1 ............. 80 Adjustments to reflect three-for-two stock split Sold to employees............ Conversion of debentures.. Issued December 31......... Shares Amount 31,617,824 1 5,808.913 381,349 10,948 47,819,034 $158,089,120 79,044,565 1,906,745 54,740 $239,095,1 70 H. Foreign Exchange In 1971, pre-tax income was charged $5,376,706 representing loss on currencies of developing coun tries. Met translation loss of $3,155,811 on long-term debt in currencies of developed countries was deferred; no amortization was provided in 1971. Met loss on currencies in 1970 was $1,075,487, all of which was charged to income. ' At December 31, 1971, there were 45,375,824 shares of common stock outstanding, after deducting 2,443,210 shares of treasury stock. Mo preferred shares have been issued. The stockholders previously authorized plans for granting > options to purchase common stock at the fair market value at the i data of grant to officers and key employees. The options must be | exercised within five years from the date of issuance. Changes during 1971 in the number of shares under option were: 1967 Option Plan 1964 Incentive Plan Dividend Units- Options (adjusted lor three-fortwo stock split July 1, 1971 j. Outstanding January 1 .. .. Granted .............................. ... Exercised .......................... r.'-.itired or terminated ........ Outstanding December 31 .. ... i'.Tit cpiioned December 31 ..... ... Price range on outstanding cottons at December 31 ... . 493.121 86.827 64.191 867 514.890 20,919 $40.96lo 67.29 100.125 . 69.930 22.695 7.500 92,130 4,500 3.750 92.S80 282,120 S4Q.00 to 50.83 A gividom! unt! is die rnjlit to receive Sor a specified period cash payments equiva lent ;i: vaiue :c cash dividends oaid duniitj such period on one share of common stock The Company's Award Plan permits the granting, during the j ten-year period ending May 1979. of 525,000 shares of Re stricted or Deferred Slock, cr a combination thereof, to selected ' employees in lieu of cash for services During 1971, 735 shares ' ci Dei erred Stock were swarded; no Restiicted Stock was issued. k I. Retirement Plans The total cost of pension plans for ail companies in the consolidated group in 1971 and 1 970 was .... $20,580,388 and $17,1 77,000, respectively. Pension fund ^ assets exceed the actuarially computed value of vested benefits. CD CD J. Taxes on Income The provision for income'taxes consists of. cd (In millions) *" 1671 '1970 CO Taxes currently payable met of investment tax credits. 1971. S5 0 1970 $9 11................... .......... Add (deduct) --deferred income taxes...... ............ $05 3 5.7 r-o CO 1i Provision for income taxes............... ............ S91.0 S63.1 K. Investment Grants Investment grants credited to n:ame in 1971 and 1970 amounted to $894,405 and S200.Q0G. respec tively. At December 31, 1971, there were deferred investment grants of $3,248,031 to he used to offset future plant censiopment costs. L. Contingent Liabilities and Commitments Suits ha.e seen started against the Company and certain subsidiaries because cr alleged product damage and other claims All suits are using contested and the amount of uninsured liability thereuncer, il any. is considered to be immaterial. Lease rental payments (stated in millions) due in each the five years after 1971 are: 1 972, $4-2,4' 1973. $37.5 1 974 $33.1: 1 975, S29.4, 1976, $27 5. CONDENSED COMPARATIVE STATEMENTS :sTQOO The Dow Chemical Company and Subsidiary Companies 1971 1970 1969 1968 1967 1961 1951 ' Financial Condition (in millions) Current Assets: Cash and marketable securities......................... Receivables (less reserves)................................. Inventories................................................................ Total current assets...................................... Current Liabilities: Notes payable......................................................... Accounts payable and accruals......................... Taxes on income.................................................... Total current liabilities.................................. Working Capital..................................................... (A) Property (at cost) ................................................ Depreciation............................................................ Net property.................................................... IB) Other Assets........................................................... ..(C) Investment (A) plus (B) plus (C)......................... ..(D: Long-term Indebtedness..................................... Other Liabilities and Reserves ......................... Total ......................................................... . .(E) Common Stockholders' Equity (D) minus (E) . S 106 1 504.3 395.5 1.005.9 S 78.6 445,1 368.2 891.9 S 133.4 ' S 141.7 430 0 357 9 289 1 276 3 852 5 775 9 S 104.5 307.0 216.6 628 1 S 48 5 1 35 6 164 6 34S 7 368.3 366.8 56.4 791.5 214 4 2.722.9 1.158.8 1,564 1 508.7 2,287 2 1,010.1 80.1 1.090 2 SI.197.0 229.3 350 6 56 8 636.7 255.2 2.524 3 1.086.1 1.438.2 474 7 2.168 1 969 8 70.8 1.040 6 SI.127 5 337.8 291.1 51 6 680 5 172.0 2.305 1 1.010.1 1.295.0 493.5 1.965 5 798.0 61.0 859.0 SI. 106.5 246.5 272 4 52.5 571.4 204 5 2.060.4 933.4 1.1270 441.6 1.773 1 684 6 46 6 731 2 SI.041 9 175 5 199 0 45.7 420.2 207.9 1.756.0 859 9 896.1 426.6 1.530 6 551 6 58 557 4 S 973.2 101.2 86 2 25 2 213 2 135.5 1.307 S 696 0 611.8 96 3 843 6 152.7 13 154 0 S 689.6 S 47 6 ' 42 7 ( 48 E i 139 l ' .2 i 41 6 ; 67 1 \ 108.9 [ ) 302 384.5 104 2 280 3 ' ( 95 320 0 62 4 36 4 988 ; ;1 j ( i S221 2 Income (in millions) Net sales of products and services........................ Cost ol sales ........................................... Selling and administrative expenses. . . . Products and services operating income . Investment and sundry income -- net ............ Interest income (expense)......................................... Non-products and services income (loss) . . Taxes on income ........................................... Minority interests' share in income........................ Nat income before extraordinary items . Net income after extraoidmaiy items . .. S2.052 7 1.5173 250 7 284.7 43 9 (78.5) (34 6) 91 0 47 S 154 4 S 154 7 SI.911.1 1.417 8 233 7 259 6 36.0 (73 5) (37.5) 88 1 40 S 130 0 S 102 1 SI.797.1 1.343 7 208 7 239 7 43.9 (54 3) (104) 81 5 5.2 S 142.6 S 142 6 SI .652.5 1.225 2 198 3 223 5 32.0 (33 9i (1 9i 92 0 4.0 S 130 6 S 130.6 SI .332.7 1.032 3 135 0 S 841 7 649 2 96 5 214 9 96 0 28.1 15.0 (21 0) -- _<7_9_ 7 1 7.1 87 7 42 3 _ _J 1; S 1 34 3 S 134 3 s 60 9 s 60 9 211 4 20 7 107 5 36 (4 Ovi --i 69 0 ? 41 5 S 41 5 Other Statistics (in millions) Additions to property......................... Depreciation ............... ........................... Research and development expenses ... Taxes imajor)......................... ... Wtuies dno sold ies paid ... ... Cost c? employee benefits .. Numb-'.; oi employees at yea: -end i thousands';. . Cash dividends cieelai oci on Common Stock Per share of Common Stock (m dollars) ( ). Earnings before extraordinary items Eainmgs attei extraordmaiy items . . Cash dividends pan; .. Market closing puce on Decentl)*1! 31 .. ( ) A<i|usted for stock spins nnd stock dividends. S 364 6 2183 95 3 161 8 464 7 72.2 47 8 81 0 S 34S 1 207 7 91 5 136 5 -lOO 0 4- 64 4 47 4 73.5 5 370.6 177.9 S7 3 140 7 410 6 56 3 47 4 77 3 S 306 3 157 2 83 8 144 5 335 1 47 9 47 4 72 5 S 192 3 136 0 76.8 125.9 325 6 33 6 36 4 66 1 s 1150 99 4 51 0 70 4 224 3 21.2 30 6 43 5 3 40 3 41 1 77 78 33 2 87 2.26 1.73 49.03 3 14 3 14 1 67 45 75 2.89 2 39 1 57 52 on 2 93 2.93 1 43 33.08 1 35 1 35 91 46 86 S 91 C 170 75 C 73 5 >I715 - 1 C5 1 l.i -- LOCATIONS & HOLDINGS ST00U4625 The Dow Chemical Company Corporate Headquarters 2030 Dow Center Midland, Michigan 48640 UNITED STATES 45 Manufacturing Locations in 2 5 States and 1 Territory"' Arizona - Tucson Arkansas - Magnolia, RussellvilleCalifornia-Costa Mesa Fresno, Pico Rivera, Pittsburg, Torrance. Van Nuys Colorado --Denver. Golden Connecticut-Gales Ferry. Trumbull Florida --Miami Georgia - Da.ton, Lawrenceville Hawaii -- Honolulu Indiana-Decatur, Indianapolis. Zionsvilie Iowa -- Davenport Kentucxv --Carrollton. Elizabethtown Louisiana -- Piaouemine Michigan --Bay City. Ludington. Midland Minnesota -- Biwabik Missouri -- Cape Girardeau. Pevely New jersey --Carteret New York - New York North Carolina - Greensboro Ohio-Cleveland Findlay. Ironton. Newark Oklahoma-Tii'sa Pennsylvania - Roversford South Carolina - Andersen Texas --Freeport. Oyster Creek Virgin Islands-St. Croix Virginia -- Williamsburg Washington - Wenatchee ri'ivun.:. Kc: -, Owner: Cnm:;.:ni"S Corais Cow CC'C Micinv. Flouri.i (50> i DO'CO F.iCWi-.i IV: Cur;.-. !_oc Angtb'S.- Caiifo'iiia 15b' a Dow Bari'S-cb-.- Company Williamsburg V.rgin,o 15 j" Cc-.v Corn,-in Corcora:.on Midland. M,oo;can 150V Ti---- Kamac: P..-. Co.. Davenport. lowaibC'v 0as:: Lm- Company Houston Texas GOV EUROPE 5 ' Men nact-.n no Loc mens m 0 Countncs- B- 'g-um - Sen-eie France - Drusemvim C- 'n.an-. - Gr--"Vn St.vue Gmece - Lcvnc-- b.c.y-E-r-id ; C ir.eo Livorno. Mitctr. Nap Ven cT'-c Neo -r cnn.-. - Rctl-mduiv. Tei n,iuc-:Pcrtug.:. -- L'soc-'Sc.i: -- 5 op; 3- n M..drir| LKa-- Km-;-a Lynn Eng.anc: Barn, '.`.'a P'lncca. Pmur Ganna Companies 3m . M--3 ms Amcmidum Companme dcs Services Dowell Schlumberger Pans France (50V Dowell Schiumberger Corporation, London, England (50V Dow-Unqumesa S A. Bilbao. Spam (85:o) Gtuppo Lepetit S.p.A. Milan, Italy 178%) LATIN AMERICA 1 1 Manufacturing Locations in 6 Countries Argentina --Buenos Aires Cordoba. San Lorenzc Brazil --Guaruia. Sao Paulo Chile-Concepcion. Santiago Colombia - Barrancabermeia. Cartagena Ecuador-Quito Mexico-Mexico City Principal Partly Owi-.ec Companies. Atanor S.AM., Buenos Ares. Argentina (24%) Banco Cidade de Sao Paulo, S A.. Sao Paulo. Brazil (45 V Laboratories Industrials Fnrmaceuticos Ecuatonanos. Quite Ecuador (63 u Petroquimica Dow S A Concepcion. Chile 17b Piramides Brasilia S.A Induslna e Coniercio. Sao Paulo. Brjzil (2 3 d CANADA 1 0 Manufacturing Locations in 4 Provinces Alberta -- Edmonton Fy-t Smhnichewnn British Columbia-La';;'-.-.Ontario-Don M'lis S m . TVici-- Bn. Toronto Weston Qu.-!V'C -- Momre.i. V PACIFIC i 3 Manufacturing Lo:.v ens m 6 Countries Australia-Alien,-: 5-;-sn-; Rhod- s Smith,f'-'u li'.ota-- 3 a-'-:.:,,',' Japan --Kawasaki V :. , Mr.. , SaucerSuzuk.i Korea - UlSt.n [uc.d,. : ms-wctmi .' Mr aysia- Kuala Lu:" :: New ZeaiuiKi - N-m - . --: Prmcipu- Pj'tly U\:,-- : ..r. As ahi Du.-. Lm-i !--, I 7c- , ,n : 5 r- < Ccnsoiidat-a F-'ti'iz--; : 3 Aust. i'1 a. 20 Ivon W,:t,m - De." L -it'i N-.vZ-. .. ,r-l,5 . Korea c C,"---n'.i; 2. ; ,/i Uisan. Koie': i5`' .. P.iciiic Cii-cn'icais 3,-- - : A..^: a Lumpur Mala mu"- - 50V PcivciKm ui'n'led 3 :............. 2 n : - - : .it, a - 13 . i-I .r - cum . f. Beitm mi, A- . - in I. - - in id --------------------------------- * THE DOW CHEMICAL COMPANY MIDLAND, MICHIGAN 48640 .\.\T;ivLi;SApy " It:" L< ?<-; . i i i