1P.Dawson/02.02.2008®Trademark of The Dow Chemical Company

EH&S Challenges and Opportunities for Dow in China

2P.Dawson/02.02.2008®Trademark of The Dow Chemical Company

Agenda

•Dow Chemical Company Vision and Mission

•Environmental, Health & Safety (EH&S) Policy

•Challenges In Asia…And Opportunities!

•Business Realities

•Summary

3P.Dawson/02.02.2008®Trademark of The Dow Chemical Company

Our Vision

To be the largest, most profitable and most respected chemical company in the world.

Our Mission

To constantly improve what is essential to human progress by mastering science and technology.

Who We Are

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Who We Are

• A science and technology leader with annual sales of $49 billion • Founded in 1897 by Herbert H. Dow in Midland, Michigan• Supplies more than 3,300 products to customers in 175 countries• 156 manufacturing sites in 37 countries• Employs 43,000 people globally• Ranked 34th and 105th on FORTUNE 500 and FORTUNE Global 500

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What We Do

• Apply science and technology to create innovative solutions for the global marketplace

• Provide innovative chemical, plastic and agricultural products and services• Focus on delivering value to our customers• Respect the diverse cultures and mindsets of our people

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Who We Are In Asia

Doing business in China since 1930’s, opening Hong Kong office in 1957 and Taiwan office in 1968

1979 Dow established its first China office in Guangzhou Today, Dow has:

• 5 business centers in Beijing, Shanghai, Guangzhou, Taipei and Hong Kong

• 10 manufacturing sites and joint ventures in Greater China. Employs over 2,000 professionals Dow continues to invest in the region:

• Yulin Coal-to-Chemicals project• Expanding our Research & Development facilities to become one of

our global centers – will work on developing energy efficient technology

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Dow in Asia Pacific

Sapporo

Kanuma Tokyo

Nagoya

Kinu Ura Osaka Kasaoka

Ogori

Matsuyama Fukuoka

GumiSeoul

Yeosu

Ulsan Zhangjiagang

Nantong

Shanghai

Ningbo

Taipei Hsinchu Nankang

Ping Tung

Zhongshan

Hong Kong

Manila

General Santos City

Perth

Brisbane

AucklandNew Plymouth

Sydney

Altona

Sunbury

Medan

Merak

Jakarta

SingaporePetaling Jaya

Shah AlamKerteh

Bangkok

Map Ta Phut

Ho Chi Minh City

Guangzhou

Wuhan

Beijing

Christchurch

Kasugade

Huzhou

Sendai

Gotemba Niihama

Yokkaichi

Kawasaki

Tawau

Morioka

Business Center

Manufacturing Site

R&D/TS&D Center

• US$5.4 billion sales revenue for 2006

• About 4,000 employees in 13 countries

• Over 60 manufacturing site & office locations

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What is Dow’s Environmental, Health & Safety (EH&S) Policy

At Dow, protecting people and the environment is part of everything we do and every decision we make. Each employee has a responsibility to ensure that our products and operations meet applicable government or Dow standards - whichever is more stringent. - from the Dow EH&S Policy

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Environmental, Health & Safety (EH&S) Challenges

Lack of Government Regulations and Strong, Uniform Enforcement

Lack of EH&S Culture

Lack of Knowledgeable and Experienced EH&S Professionals

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Lack of Government Regulations and Strong, Uniform Enforcement

The Challenge: Dow’s EH&S policies are more stringent that other companies Government does not enforce standards and fines are trivial Government does not have common, fair approach to enforcing standards Fines and penalties are minimal Dow values its reputation and values its right to operate in communities

The Opportunity:Good EH&S performance has helped Dow:

Avoid costs associated with employee injury and illness, environmental remediation, fines and penalties, and even being shut-down

Attract and retain the best people Attract credible partners to form value creating business alliances Strengthen our relationships in the communities where we operate Establish stronger relationships with government officials Demonstrate leadership by sharing best practices with other companies in the region Differentiate ourselves in the market with global customers/partners

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Lack of EH&S Culture

The Challenge: Continue to educate Chinese employees on the importance of EH&S on a personal

and business level Increase awareness among Dow customers and value-chain partners of the property

safety and handling of our products.

The Opportunity:Good EH&S performance has enhanced Dow’s reputation.

Working with State Administration of Worker Safety to share best practices to improve the EH&S performance of other small to medium size businesses

Established safety programs within the communities we operate to educate children and families on safe behaviors

Helps retain good employees Helps protect current and future sales

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Lack of Knowledgeable and Experienced EH&S Professionals

The Challenge Dow’s growth in China is significant and an essential part of our overall business

strategy. In order to be successful we must have competent EH&S professional to

implement our programs at manufacturing and R&D facilities as well as product stewardship programs.

Competition for talent is fierce and it can be difficult to keep the best peopleThe OpportunityGood EH&S performance has:

Built Dow’s reputation as a best-in-class employer, allowing us to be more successful than other Western companies at attracting and retaining EH&S professionals

Demonstrated to EH&S professionals that they will be valued by Dow and will have many more leadership opportunities

Provided EH&S professionals with opportunities to learn and grow within their field of study

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Business RealitiesIn Asia

•Growth - Is - Tremendous!Must be “sustainable

•Asia Business Practices Are DifferentEthics and ComplianceGovernment and Industry CooperationWestern Companies Must Learn“Know Who” vs. “Know How”

•Western Mindset Asian MindsetLegal vs. RelationshipLogic vs. LogicRelationship vs. Legal

•Environmental Issues Must Be Addressed In a Business Strategy

•Development and Retention of Local People Is Critical To Success

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Summary

•Environmental Challenges In Asia…Must Be Viewed As Opportunities

•Dow Chemical is Providing Environmental Leadership

•People and Technology Turn Environmental Challenges Into Business Opportunities

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