As of 2014, Dow ranked third in chemical production (after BASF and Sinopec), and as of 2015, was the third largest chemical company in the world by revenue (after Sinopec and BASF). Dow was also the world's largest chlorine producer, with 5.7 billion tons a year of production before Dow's association with Olin was formed; was ranked as the world's largest plastics manufacturer during 2008, and the largest manufacturer of polyalkylene glycols in 2013.
Dow's principal lines of business include Agricultural Sciences, Consumer Solutions, Infrastructure Solutions, Performance Materials & Chemicals, and Performance Plastics. It employs approximately 53,000 people worldwide. Dow's 2014 sales totaled approximately $58.2 billion. Dow has been called the "chemical companies' chemical company" in that most of its sales are to other industries rather than end users, although Dow sells directly to end users primarily in the human and animal health, agriculture, and consumer products markets.
The company was founded in 1897 by Canadian-born chemist Herbert Henry Dow. After a period of diversification, it became a major chemical company, a significant player in the world market, and a part of the military-industrial war effort during both World Wars.
Dow's Agricultural Sciences segment provides crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and oils. The business invents, develops, manufactures and markets products for use in agricultural, industrial and commercial pest management, and food service. The segment has sales in 135 countries, with global research and development and manufacturing facilities, and accounted for 12.5% of Dow's total sales in 2014. In late November 2015, the Dow Chemical Company announced it struck a deal to sell part of its herbicide business, driven by "low crop prices" and its subsequent falling sales. Its portfolio of dinitroaniline weed killers would pass to Gowan Company as part of the sale, as well as registrations and trademarks such as Treflan and a packaging facility in Alberta, Canada.
Dow's Consumer Solutions segment consists of three global businesses: Consumer Care, Dow Automotive Systems and Dow Electronic Materials. These businesses develop and market customized materials using technology and patented chemical processes for specialty applications, including semiconductors and organic light-emitting diodes, adhesives and foams used by the transportation industry, and cellulosics for pharmaceutical formulations and food applications. The businesses in the Consumer Solutions segment serve multiple markets including automotive; electronics and entertainment; healthcare and medical; and, personal and home care goods. Consumer Solutions made up 8% of Dow's sales in 2014.
The Infrastructure Solutions segment is composed of four global businesses: Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions, and Performance Monomers. These businesses produce products such as architectural and industrial coating applications, building insulation, adhesives, microbial protection for the oil and gas industry, and water technologies. Dow Energy & Water Solutions for example, manufactures Filmtec reverse osmosis membranes which were used during the 2000 and 2008 Summer Olympics. Infrastructure Solutions accounted for 14.5% of Dow's sales in 2014.
The Performance Materials & Chemicals segment consists of five global businesses: Chlor-Alkali and Vinyl, Chlorinated Organics, Epoxy, Industrial Solutions and Polyurethanes. Products produced by this segment serve various end markets, ranging from agriculture, consumer goods, electronics and construction. Most of Dow's EBITDA margin expansion at this division comes from reduced raw material costs in turn due to the integration of a propylene production facility in Freeport. Performance Materials & Chemicals accounted for 26% of Dow's sales in 2014. The Company completed its chlorine products transaction to Olin on October 5, 2015, valued at $5 billion.
The Performance Plastics segment is the world's leading plastics franchise and is composed of five global businesses: Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy, and Hydrocarbons. Products from this segment are used for ubiquitous applications, ranging from diaper liners to beverage bottles and oil tanks. The products are based on the three major polyolefins – polystyrene (such as Styron resins), polyethylene and polypropylene. Performance Plastics made up 39% of Dow's sales in 2014.
Dow was founded in 1897 by Canadian-born chemist Herbert Henry Dow, who invented a new method of extracting the bromine that was trapped underground in brine at Midland, Michigan. Dow originally sold only bleach and potassium bromide, achieving a bleach output of 72 tons a day in 1902. Early in the company's history, a group of British manufacturers tried to drive Dow out of the bleach business by cutting prices. Dow survived by also cutting its prices and, although losing about $90,000 in income, began to diversify its product line.
In 1905, German bromide producers began dumping bromides at low cost in the U.S. in an effort to prevent Dow from expanding its sales of bromides in Europe. Instead of competing head-on with the German producers, Dow bought the cheap German-made bromides and shipped them back to Europe, undercutting his German competitors. Even in its early history, Dow set a tradition of rapidly diversifying its product line. Within twenty years, Dow had become a major producer of agricultural chemicals, elemental chlorine, phenol and other dyestuffs, as well as magnesium metal.
During World War I, Dow supplied many war materials the U.S. had previously imported from Germany. Dow produced magnesium for incendiaryflares, monochlorobenzene and phenol for explosives, and bromine for medicines and tear gas. By 1918, 90% of Dow production was geared towards the war effort. At this time, Dow created the diamond logo that is still used by the company. After the war, Dow continued research in magnesium, and developed refined automobile pistons that produced more speed and better fuel efficiency. The Dow metal pistons were used heavily in racing vehicles, and the 1921 winner of the Indianapolis 500 used the Dow metal pistons in his vehicle.
Dow Corporate headquarters in Midland
In the 1930s, Dow began producing plastic resins, which would grow to become one of the corporation's major businesses. Its first plastic products were ethylcellulose, made in 1935, and polystyrene, made in 1937.
From 1940 to 1941, Dow built its first plant at Freeport, Texas, in order to produce magnesium extracted from seawater rather than underground brine, marking the first time that humans had mined the ocean for metal. The Freeport plant is now home to Dow's largest site - and one of the largest integrated chemical manufacturing sites in the world. The site grew quickly - with power, chlorine, caustic soda and ethylene also soon in production. Growth of this business made Dow a strategically important business during World War II, as magnesium became important in fabricating lightweight parts for aircraft. Based on 2002–2003 data, the Freeport plants (known as "Texas Operations" internally) produced 27 billion pounds of products, or 21% of Dow's global production. In 1942, Dow began its foreign expansion with the formation of Dow Chemical of Canada in Sarnia, Ontario to produce styrene for use in styrene-butadienesynthetic rubber. Magnesium production from Freeport in 1942 amounted to 84% of the whole country's production capacity. Also during WWII, Dow and Corning began their joint venture, Dow Corning, to produce silicones for military and, later, civilian use.
The "Ethyl-Dow Chemical Co." plant at "Kure's Beach" NC, the only plant on the East Coast producing bromine from seawater, was attacked by a German U-boat in 1942.
In the post-war era, Dow began expanding outside of North America, founding its first overseas subsidiary in Japan in 1952 as Asahi-Dow Limited, and in several other nations soon thereafter. Based largely on its growing plastics business, Dow opened a consumer products division beginning with Saran wrap in 1953. Based on its growing chemicals and plastics businesses, Dow's sales exceeded $1 billion in 1964, $2 billion in 1971, and $10 billion in 1980.
From 1951 to 1975, Dow managed the Rocky Flats Plant near Denver, Colorado. Rocky Flats was a nuclear weapons production facility that produced plutonium triggers for hydrogen bombs.
Aerial view of the Rocky Flats Plant from directly overhead in 1954.
There were several instances of radioactive waste leakage and contamination propagated from fires during Dow's management of the facility. In 1957 a fire burned plutonium dust in the facility and sent radioactive particles into the atmosphere.
The United States military dropped napalm bombs on North Vietnam during the Vietnam War. Dow was one of several manufacturers who began producing the napalm B compound under government contract from 1965 at its Torrance, California plant. After experiencing protests and negative publicity, the other suppliers discontinued manufacturing the product, leaving Dow as the sole provider. The company said that it carefully considered its position, and decided, as a matter of principle, "its first obligation was to the government." Despite a boycott of its products by anti-war groups and harassment of recruiters on some college campuses, Dow continued to manufacture napalm B until 1969. The U.S. continued to drop napalm bombs on North Vietnam until 1973.
A major manufacturer of silicone breast implants, Dow Corning (a joint venture between Dow and Corning Inc.) was sued for personal damages caused by ruptured implants. On October 6, 2005, all such cases pending in the United States Court of Appeals for the Sixth Circuit against the company were dismissed. The company stated: "Should cases involving Dow Corning's breast implant and other silicone medical products be filed against the company in the future, they will be accorded similar treatment."
Union Carbide became a subsidiary of Dow in 2001. The Bhopal disaster of 1984 occurred at a pesticide plant owned by Union Carbide India Limited, a subsidiary of Union Carbide, 17 years before Dow’s acquisition. A gas cloud containing methyl isocyanate and other chemicals spread to the neighborhoods near the plant where more than half a million people were exposed. More than 27 years after the event, the actual number of fatalities is still unknown.
Activists are seeking to have Dow held responsible for the ongoing cleanup of the site. Dow maintains that the Madhya Pradesh state government is responsible for the cleanup.
Until the late 1970s, Dow produced DBCP (1,2-dibromo-3-chloropropane), a soil fumigant, and nematicide, sold under the product names Nemagon and Fumazone. Plantation workers who became sterile or were stricken with other maladies subsequently sued both Dow and Dole in Latin American courts, alleging that their ailments were caused by DBCP exposure.
A group of workers then sued in the U.S., and, on November 5, 2007, a Los Angeles jury awarded them $3.2 million. Dole and Dow vowed to appeal the decision. On April 23, 2009, a Los Angeles judge threw out two cases against Dole and Dow due to fraud and extortion by lawyers in Nicaragua recruiting fraudulent plaintiffs to make claims against the company. The ruling casts doubt on $2 billion in judgments in similar lawsuits.
Areas along Michigan's Tittabawassee River, which runs within yards of Dow's main plant in Midland, were found to contain elevated levels of the cancer-causing chemical dioxin in November 2006. The dioxin was located in sediments two to ten feet below the surface of the river, and, according to the New York Times, "there is no indication that residents or workers in the area are directly exposed to the sites". However, people who often eat fish from the river had slightly elevated levels of dioxin in their blood. In July 2007, Dow reached an agreement with the Environmental Protection Agency to remove 50,000 cubic yards (38,000 m3) of sediment from three areas of the riverbed and levees of the river that had been found to be contaminated. In November 2008, the Dow Chemical Company along with the United States Environmental Protection Agency and Michigan Department of Environmental Quality agreed to establish a Superfund to address dioxin cleanup of the Tittabawassee River, Saginaw River and Saginaw Bay.
In February 2013 a federal court rejected two tax shelter transactions entered into by Dow that created approximately $1 billion in tax deductions between 1993-2003. In the stated opinion, the Court termed the transactions "schemes that were designed to exploit perceived weaknesses in the tax code and not designed for legitimate business reasons." The schemes were created by Goldman Sachs and the law firm of King & Spalding, and involved creating a partnership that Dow operated out of its European headquarters in Switzerland. Dow stated that it had paid all tax assessments with interest. The case was a lawsuit against the Internal Revenue Service seeking a refund of the taxes paid. The case was appealed to the United States Court of Appeals for the Fifth Circuit, where Dow's claims were again rejected. Dow has petitioned for an en banc hearing by the 5th Circuit, arguing that the decision was contrary to established case law. The court denied this petition.
Recent mergers, acquisitions and reorganization
1990s – transition from geographic alignment to global business units
In the early 1990s, Dow embarked on a major structural reorganization. The former reporting hierarchy was geographically based, with the regional president reporting directly to the overall company president and CEO. The new organization combines the same businesses from different sites, irrespective of which region they belong (e.g. the vice president for Polystyrene is now in charge of these plants all over the world).
At the beginning of August 1999, Dow agreed to purchase Union Carbide Corp. (UCC) for $9.3 billion in stock. At the time, the combined company was the second largest chemical company, behind DuPont. This led to protests from some shareholders, who feared that Dow did not disclose potential liabilities related to the Bhopal disaster.
William S. Stavropoulos served as president and chief executive officer of Dow from 1995 to 2000, then again from 2002 to 2004. He relinquished his board seat on April 1, 2006, having been a director since 1990 and chairman since 2000. During his first tenure, he led the purchase of UCC which proved controversial, as it was blamed for poor results under his successor as CEO Mike Parker. Parker was dismissed and Stavropoulos returned from retirement to lead Dow.
On August 31, 2006, Dow announced that it planned to close facilities at five locations:
Sarnia, Ontario was Dow's first manufacturing site in Canada. In 1942, the Canadian government invited Dow to build a plant there to produce styrene (an essential raw material used to make synthetic rubber for World War II). Dow then built a polystyrene plant in 1947. Up to the early 1990s, the Chemical Valley site contained numerous plants, while Dow Canada's headquarters was located at the Modeland Centre, and a new River Centre complex was opened which housed Research and Development. Since then, several plants (Dow terminology for a production unit) on the site have been dismantled and the Dow Canada headquarters moved to Calgary, Alberta. The Dow Fitness Centre was donated to the YMCA of Sarnia-Lambton, and the Modeland Centre was sold to Lambton County and the City of Sarnia. In 2002, the steam plant was demolished and land on the site was sold to TransAlta which built a natural gas power plant.
One plant at its site in Barry (South Wales), a triple string STR styrene polymer production unit. Integral in the company's development of the super high melt foam specific polymers & Styron A-Tech high gloss, high impact polymers.
On November 2, 2006, Dow and Izolan, the leading Russian producer of polyurethane systems, formed the joint venture Dow-Izolan iand built a manufacturing facility in the city of Vladimir. Also in 2006, Dow formed the Business Process Service Center (BPSC).
In December 2007, Dow announced a series of moves to revamp the company. A December 4 announcement revealed that Dow planned to exit the automotive sealers business in 2008 or 2009. Within several weeks, Dow also announced the formation of a joint venture, later named K-Dow, with Petrochemical Industries Co. (PIC), a subsidiary of Kuwait Petroleum Corporation. In exchange for $9.5 billion, the agreement included Dow selling 50% of its interest in five global businesses: polyethylene, polypropylene and polycarbonate plastics, and ethylenamines and ethanolamines. The agreement was terminated by PIC on December 28, 2008.
On July 10, 2008, Dow agreed to purchase all of the common equity interest of Rohm and Haas Co. for $15.4 billion, which equated to $78 per share. The buyout was to be financed with equity investments of $3 billion by Berkshire Hathaway Inc. and $1 billion by the Kuwait Investment Authority. The purpose of the deal was to move Dow further into specialty chemicals, which offer higher profit margins than the commodities market and are more difficult to enter for the competition. The purchase was criticized by many on Wall Street who believe the company overpaid (about a 75% premium on the previous day's market capital) to acquire the company; however, the high bid was needed to ward off competing bids from BASF. The transaction to purchase the outstanding interest of Rohm and Haas closed on April 1, 2009.
On December 8, 2008, Dow announced that due to the 2008 economic crisis, it would accelerate job cuts resulting from its reorganization. The announced plan included closing 20 facilities, temporarily idling 180 plants, and eliminating 5,000 full-time jobs (about 11% of its workforce) and 6,000 contractor positions.
Citing the global recession that began in the latter half of 2008, the Kuwaiti government scuttled the K-Dow partnership on December 28, 2008. The collapse of the deal dealt a blow to Dow CEO Andrew Liveris' vision of restructuring the company to make it less cyclical. However, on January 6, 2009 Dow announced they were in talks with other parties who could be interested in a major joint venture with the company. Dow also announced they that it would be seeking to recover damages related to the failed joint venture from PIC.
After the K-Dow deal collapsed, some speculated that the company would not complete the Rohm & Haas transaction, as the cash from the former transaction was expected to fund the latter. The deal was expected to be finalized in early 2009 and was to form one of the nation's largest specialty chemicals firms in the U.S. However, on January 26, 2009 the company informed Rohm and Haas that it would be unable to complete the transaction by the agreed upon deadline. Dow cited a deteriorated credit market and the collapse of the K-Dow Petrochemical deal as reasons for failing to timely close the merger. Around the same time, CEO Andrew Liveris said a first- time cut to the company's 97- year- old dividend policy was not "off the table." On February 12, 2009, the company declared a quarterly dividend of $0.15/share, down from $0.42 the previous quarter. The cut represented the first time the company had diminished its investor payout in the dividend's 97-year history.
The transaction to purchase the outstanding interest of Rohm and Haas closed on April 1, 2009. After negotiating the sale of preferred stock with Rohm and Hass' two largest stockholders and extending their one-year bridge loan an additional year, the company purchased Rohm and Haas for $15 billion ($78 a share) on March 9, 2009.
In 2011, Dow and Saudi Arabian Oil Company (Saudi Aramco) developed the joint venture, Sadara Chemical Company (Sadara, worth $20 billion), with initial plants to come on stream in 2015. The joint venture is expected to enable Dow’s strategy to drive long-term profitable growth, and is the largest chemical complex to be built in a single phase. As part of two "key strategic planks" for the company, construction of the largest single-construction petrochemicals complex will represent a tenfold increase in Dow's storage and handling requirements, together with Dow's US Gulf Coast investments. Besides storage, the plant will produce a range of chemicals, particularly those used in textiles, packaging and food additives.
In the fourth quarter of 2014, Dow announced new operating segments in response to its previously announced leadership changes. The company stated it would give further support to its end-market orientation and increase its alignment to Dow’s key value chains – ethylene and propylene.
Several plants on the Gulf Coast of the US have been in development since 2013, as part of Dow's transition away from naphtha. Dow estimates the facilities will employ about 3000 people, and 5000 people during construction. The plants will manufacture materials for several of its growing segments, including hygiene and medical, transportation, electrical and telecommunications, packaging, consumer durables and sports and leisure.
Dow’s new propane dehydrogenation (PDH) facility in Freeport, Texas, is expected to come online in 2015, with a first 750000 metric tonne per year unit, while other units could become available in the future. An ethylene production facility is expected to start up in the first half of 2017.
Consolidation, Acquisition, and Restructuring in 2015
On March 27, 2015, Dow and Olin Corporation announced that the boards of directors of both companies unanimously approved a definitive agreement under which Dow will separate a significant portion of its chlorine business and merge that new entity with Olin in a transaction that will create an industry leader, with revenues approaching $7 billion. Olin, the new partnership, became the largest chlorine producer in the world.
The Dow Chemical Company has begun to shed commodity chemical businesses, such as those making the basic ingredients for grocery bags and plastic pipes, because their profit margins only average 5-10%. Dow is, as of 2015, focusing resources on specialty chemicals that earn margins of at least 20%. This is in line with its restructuring, together with reducing debt, and expecting to raise more than $11 billion from asset sales by mid-2016.
On December 11, 2015, Dow announced that it would merge with DuPont, in an all-stock deal. The combined company, which will be known as DowDuPont, will have an estimated value of $130 billion, be equally held by the shareholders of both companies, and maintain their headquarters in Michigan and Delaware respectively. Within two years of the merger's closure, expected in late-2016 and subject to regulatory approval, DowDuPont will be split into three separate public companies, focusing on the agriculture, chemical, and specialty product industries. Estimates are it will take up to two years for the tax-free split. Shareholders of each company will hold 50% of the combined company. Dow Chemical CEO Andrew N. Liveris will become executive chairman of the new entity, while DuPont CEO Edward D. Breen will become CEO. The sale is expected to close in early 2016. Commentators have noted that the deal is likely to face antitrust scrutiny in several countries.
Sustainability and corporate social responsibility
In 1995, Dow launched its first set of 10-year goals. By 2005, its Sustainability Goals focused on saving energy, conserving resources, and reusing waste. The company then launched its 2015 Sustainability Goals, in which the company pledged to use science and technology to address several social and environmental challenges and reduce its global footprint. As part of these goals, the company's corporate social responsibility arm commits itself to help address climate change, protect human health, and improve energy efficiency, among others. Addressing these goals, Dow has created a process for purifying water via reverse osmosis with a reduction of energy usage of 30%; it has also created a pathway to produce Omega-9 oils, thus trying to reduce the amount of harmful fats, such as trans fats from the American diet.
Dow launched its 2025 Sustainability Goals in April, 2015. Its five goals include offsetting three times more carbon dioxide throughout its products' life cycles, facilitate the turning of waste into new products, generating $1 billion in cost savings or new cash flow, give 600 thousand hours to support students and teachers in several fields of education, and reducing its water consumption, among others. Most notably, its concept considering "natural capital" as part of major capital expenditures was inspired by its collaboration with the Nature Conservancy. This collaboration saw the creation of a coastal wetland to mitigate the impact of one of Dow's Texas plants. Dow's goal is to replicate this experience across other projects.
In 2003, Dow agreed to pay $2 million, the largest penalty ever in a pesticide case, to the state of New York for making illegal safety claims related to its pesticides. The New York Attorney General's Office stated that Dow AgroSciences had violated a 1994 agreement with the State of New York to stop advertisements making safety claims about its pesticide products. Dow stated that it was not admitting to any wrongdoing, and that it was agreeing to the settlement to avoid a costly court battle.
According to the EPA, Dow has some responsibility for 96 of the United States' Superfund toxic waste sites, placing it in 10th place by number of sites. One of these, a former UCC uranium and vanadium processing facility near Uravan, Colorado, is listed as the sole responsibility of Dow. The rest are shared with numerous other companies. Fifteen sites have been listed by the EPA as finalized (cleaned up) and 69 are listed as "construction complete", meaning that all required plans and equipment for cleanup are in place.
In 2007, the chemical industry trade association - the American Chemistry Council - gave Dow an award of 'Exceptional Merit' in recognition of longstanding energy efficiency and conservation efforts. Between 1995 and 2005, Dow reduced energy intensity (BTU per pound produced) by 22%. This is equivalent to saving enough electricity to power eight million US homes for a year. The same year, Dow subsidiary, Dow Agrosciences, won a United Nations Montreal Protocol Innovators Award for its efforts in helping replace methyl bromide - a compound identified as contributing to the depletion of the ozone layer. In addition, Dow Agrosciences won an EPA "Best of the Best" Stratospheric Ozone Protection Award. The United States Environmental Protection Agency named Dow as a 2008 Energy Star Partner of the Year for excellence in energy management and reductions in greenhouse gas emissions.
On April 12, 2007, Dow dismissed two senior executives for "unauthorized discussions with third parties about the potential sale of the company" - the two figures were executive vice president Romeo Kreinberg, and director and former CFOJ. Pedro Reinhard. Dow claimed they were secretly in contact with JPMorgan Chase; at the same time, a story surfaced in Britain's Sunday Express regarding a possible leveraged buyout of Dow. The two executives filed lawsuits claiming they were fired for being a threat to CEO Liveris, and that the allegations were concocted as a pretext. However, in June 2008, Dow and the litigants announced a settlement in which Kreinberg and Reinhard dropped their lawsuits and admitted taking part in discussions "which were not authorized by, nor disclosed to, Dow's board concerning a potential LBO" and acknowledged that it would have been appropriate to have informed the CEO and board of the talks.
On May 20, 2013, Dow launched the Dow Lab Safety Academy, a website that includes a collection of videos and resources that demonstrate best practices in laboratory safety. The goal of the website is to improve awareness of safety practices in academic research laboratories and to help the future chemical workforce develop a safety mindset. As such, the Dow Lab Safety Academy is primarily geared toward university students. However, Dow has made the content open to all, including those already employed in the chemical industry. The Dow Lab Safety Academy is also available through the Safety and Chemical Engineering Education program, an affiliate of American Institute of Chemical Engineers; and The Campbell Institute, an organization focusing on environment, health and safety practices.
The Dow Lab Safety Academy is one component of Dow’s larger laboratory safety initiative launched in early 2012, following a report from the U.S. Chemical Safety Board that highlighted the potential hazards associated with conducting research at chemical laboratories in academic institutions. Seeking to share industry best practices with academia, Dow partnered with several U.S. research universities to improve safety awareness and practices in the departments of chemistry, chemical engineering, engineering and materials. Through the pilot programs with U.C. Santa Barbara, University of Minnesota, and Pennsylvania State University, Dow worked with graduate students and faculty to identify areas of improvement and develop a culture of laboratory safety.
In January 2011, The Nature Conservancy and the Dow Chemical Co. announced a collaboration to integrate the value of nature into business decision-making. Scientists, engineers, and economists from The Nature Conservancy and Dow are working together at three pilot sites (North America, Latin America, and TBD) to implement and refine models that support corporate decision-making related to the value and resources nature provides. Those ecosystem services include water, land, air, oceans and a variety of plant and animal life. These sites will serve as a "living laboratories", to validate and test methods and models so they can be used to inform more sustainable business decisions at Dow, with a goal to influence the decision-making and business practices of other companies.
According to the American Chemistry Council, chemical production in the U.S. will continue to expand across 2015 and 2016, spurring the growth of companies such as Dow. As for exports, there may be a reduction in their overall attractiveness in overseas markets due to the stronger dollar. At the same time, the production costs are set to decrease, given the abundant supply of shale gas and natural gas. This will likely mean increased exports in the long run.
With annual sales of over $58 billion and a net income of around $3.8 billion for 2014, Dow holds a significant position in the US economy overall. Its earnings per share adjusted for non-operating items increased by almost 25% year-on-year, and while the company might reduce production costs due to higher operating leverage, the decrease in the price of oil will likely cut its short-term profits. However, CEO Andrew Liveris has pointed out that the increased demand due to lower oil prices might in fact increase profits, in part as a result of Dow's ongoing divestment program. He went as far as to say that the lower cost of natural gas as opposed to crude oil will add $2.5 billion per year to its earnings.
The lower energy and feedstock prices will, in turn, feed manufacturing, thus potentially increasing Dow's profits. The company has several projects underway in sub-Saharan Africa, and the $20 billion Sadara complex in Saudi Arabia. All in all, the company's first-quarter net income for 2015 rose to 84 cents a share.