EH&S Challenges and Opportunities for Dow in China

1. EH&S Challenges and Opportunities for Dow in China

2. Agenda • Dow Chemical Company Vision and Mission • Environmental, Health & Safety (EH&S) Policy • Challenges In Asia…And Opportunities! • Business Realities • Summary

3. Who We Are Our VisionTo be the largest, most profitable and most respected chemical company in the world.Our MissionTo constantly improve what is essential to human progress by mastering science and technology.

4. 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

5. 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

6. 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

7. Yeosu Beijing Sapporo Gumi Morioka Seoul Sendai Kasugade Kanuma Ulsan Tokyo Zhangjiagang Kawasaki Niihama Gotemba Wuhan Ogori Nagoya Yokkaichi Guangzhou Kinu Ura Nantong Huzhou Osaka Kasaoka Shanghai Matsuyama Ningbo Fukuoka Taipei Ho Chi Minh City Hsinchu Map Ta Phut Zhongshan Nankang Bangkok Ping Tung Hong Kong Kerteh Manila Shah Alam Tawau General Santos City Petaling Jaya Singapore Medan Merak Jakarta Business Center Manufacturing Site Brisbane R&D/TS&D Center Sydney Perth Auckland New Plymouth Altona Christchurch Sunbury Dow in Asia Pacific • US$5.4 billion sales revenue for 2006 • About 4,000 employees in 13 countries • Over 60 manufacturing site & office locations

8. 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

9. 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

10. 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

11. 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

12. 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 people The Opportunity Good 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

13. Business RealitiesIn Asia • Growth - Is - Tremendous! • Must be “sustainable • Asia Business Practices Are Different • Ethics and Compliance • Government and Industry Cooperation • Western Companies Must Learn • “Know Who” vs. “Know How” • Western MindsetAsian Mindset • Legal vs. Relationship • Logic vs. Logic • Relationship vs. Legal • Environmental Issues Must Be Addressed In a Business Strategy • Development and Retention of Local People Is Critical To Success

14. Summary • Environmental Challenges In Asia…Must BeViewedAsOpportunities • Dow Chemical is Providing Environmental Leadership • People and Technology Turn Environmental Challenges Into Business Opportunities