Dow Chemical

The Dow Chemical Company is an American chemical company with headquarters located in Midland, Michigan. Dow Chemical is a multinational firm that has a presence in over 175 countries. As of December 2007, the company was the second largest in the world in terms of chemical sales. From 2003 to 2007, net sales grew from nearly $33 billion to approximately $54 billion. The company employs 46,000 people worldwide. Dow Chemical operates in four major product categories: engineering and basic plastics, industrial chemicals, agricultural products, and hydrocarbons and energy. Dow subdivides the global market into five regions. These are, in order of importance (2007 sales): North America, Europe, Asia Pacific, Latin America, and India/Middle East/Africa.

[Page 532]Dow Chemical was founded in 1897 by Herbert H. Dow, a Canadian chemist. The company began as a start-up enterprise that commercially exploited Herbert Dow's invention of extracting bromine and chlorine from Midland's natural supply of underground brine. By 1902 Dow Chemical was producing mass quantities of bleach and potassium bromide. Facing stiff predatory pricing strategies by the British (in the bleach markets) and the Germans (in the bromide business), Dow Chemical early on established the tradition of diversifying its product line based on common process technology. By the early 1940s Dow had expanded well beyond bleach, chlorine, and the bromides and was a major producer of phenol and related products (e.g., dyestuffs), magnesium metal (extracted from seawater), agricultural chemicals, and resins and plastics (most notably, ethylcellulose and polystyrene), which were becoming one of the company's most important business areas.

World War II

Dow Chemical played an important role during World War II. And, conversely, the war established for Dow a foundation for its postwar expansion. First, the war demonstrated the strategic and commercial importance of the company's magnesium process. Most notably, its magnesium metal proved critical to the war efforts as it was needed for making strong yet lightweight parts for transportation equipment and for aircraft. Second, the war compelled the formation of Dow's important joint venture with Corning Glass (Dow Corning) to produce silicone and related products for military use. As with magnesium, the sil-icones would prove of important commercial importance in the postwar period. Third, the requirements of the war effort led Dow to establish its position in the great petrochemical complex of the Southwest.

By 1942 Dow had constructed and was operating its Freeport, Texas, complex to turn out products—heavy chemicals and ethylene-based synthetics—for the military. Over the next 60 years, Freeport would become Dow's largest site and “one of the largest integrated chemical manufacturing sites in the world.” In 2003 this site alone produced nearly 30 billion tons of chemical products representing nearly a quarter of Dow's total output worldwide.

Fourth, because of Dow's ability to mass-produce styrene, a critical ingredient in styrene-butadiene synthetic rubber, the war introduced Dow as a major player in the synthetic rubber industry and, at the same time, gave Dow its first experience constructing and operating a plant in another country (i.e., a styrene plant in Sarnia, Ontario, Canada).

The Postwar Years

The postwar period has been one of great opportunities to expand upon the advances made during the war, but it also brought great challenges. In the 1960s and 1970s, Dow confronted a series of legal and public relations problems unprecedented for a U.S. chemical company. The issues surrounding such Dow products as Napalm and Agent Orange (both developed for the military during the Vietnam War), the Dow-Corning breast implant controversy, and the DBDC soil fumi-gant case have continued to plague the company through drawn-out lawsuits and a continued residue of taint to its image right up to the present day.

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