DOW Business Services…

Accelerating Success

Powering up to serve
Dow Businesses and JVs

Niklas Meintrup
Director
Dow Business Services Pacific
Our Industry
Turning Feedstocks into
Essential Products

Building &
Construction

Salt Gas Electronics

Agriculture

Oil Coal Wire & Cable

Coatings

Biomass Recycle
Automotive
Dow’s Global Supply Chain: Fast Facts

9,000 global employees in Business 26,000 railcars –

second largest
Services fleet in the world

45,000 customer ship-to locations

Shipping sites in 200 countries

2.5 million shipments each year

To-thirds of volume by land; one-third by
marine

20% of shipments involve international
border crossings with Customs clearance

80% not hazardous; 1% highly hazardous

99.97% incident-free

Comprehensive Sustainability Strategy for

Supply Chain and Purchasing.
300 warehouses
& 122 terminals
Dow’s Evolving Business Model

Operating Margins

0% 10% 20%
40%
Selling, Admin, R&D Expenses % of Sales

Highly
30%
Differentiated

Market-
20% Driven
Performance

10%

Basics

0% 10% 20% 30% 40% 50% 60%

Gross Margin % of Sales
Dow’s Business Model – Three Integrated Parts

Highly Differentiated
Health & Agricultural Sciences

Market Driven Electronic & Specialty Materials

Technology Differentiation

Coatings & Infrastructure

Performance Systems
Performance
Performance Products

Basic Plastics

Basics Basic Chemicals

Hydrocarbons & Energy

Customer Intimacy
Dow’s New Operating Segments

Advanced Materials
Electronic & Coatings & Infrastructure
Specialty Materials $6.2
$5.7

Health & Agricultural Sciences

Health & Agricultural Sciences
$4.6

Performance Products & Systems

Performance Systems Performance Products
$8.2 $13.1

Basics
Basic Plastics Basic Chemicals Hydrocarbons & Energy
$14.2 $4.3 $9.0

Note: All figures represent 2008 pro forma sales, in billions of dollars
Business Services …
Gearing Up to Power the New Dow
Operating Margins

0% 10% 20%
Selling, Admin, R&D Expenses % of

40%

Highly
Differentiated
30%

Market-
Sales

20% Driven
Performance

10%
Basics

0% 10% 20% 30% 40% 50% 60%

Gross Margin % of Sales

Drive Agility

Drive Customer focus

Improve Profitability

Enhance Flexibility

Enable Innovation
Business Services

Business Services announced late 2008

Supports Dow’s operating model

Capitalizes on strong foundation of functional
excellence

Organized around service capabilities delivered by:

Customer Service, Supply Chain, Environment Health & Safety,
Purchasing, Information Technology, Facilities Management,
Six Sigma, Process-focused elements of Finance and HR
Business Services Vision

“Dow Business Services offers a leveraged

model that enables Dow businesses and
JVs to run faster, safer, leaner and more
profitably than any competitor in the
industry.”

To achieve this vision, we are:

Organizing around our businesses and JVs
• Adopting a new, more flexible, market-competitive approach
• Listening to better understand and meet client and their customers needs
Emphasizing operational excellence
• Increasing service integration and leveraging best practices
• Changing how Dow performs daily operational activities
• Allowing businesses and JVs to focus on strategy and customers
Understanding the Pieces of the Puzzle…

Dow Businesses align to 3 Operating Models

Dow Corporate Center provides governance and oversight

Dow Business Services provides service capabilities to all
3 operating models and JVs

Performance
Products

Dow AgroSciences
Chemicals,
Plastics & Feedstocks
Advanced Materials
Performance
Products
JVs & Basics Market-Driven
Corporate Center
 Focus on the customer

Flexibility to bring
capability that meets the
growth demands of Dow’s
businesses and JVs and
their customer

Continue to increase
productivity, while
Dow Businesses & JVs maintaining scale and
Client Interface / Service Management
lowering cost to serve
Business /
Finance
Office

Maintaining required
Business Consulting &
integration throughout
Asset Project
Process
Operations and
Expertise Business supply chain
Services Services Services
Support
Center Work
Center Process

Bring competitive
advantage to Business
Business Services Operating Unit Models Units
Business Services Organization Model

Corporate Center Leveraged Business Units Independent Business Units

JVs & Non-Affliated Basics Performance Market Driven

Service Management

Business /
Finance Office

Customer Service
Business Consulting &
Supply
Business
Chain
Process Asset Project and Expertise
Services Center Operations Support Center Services

EH&S
Services Work
Process

Purchasing

IT

Facilities Mgmt

Six Sigma
Business Services Operating Unit Models

Process-focused
elements of Finance
and HR
Business Services Organization Model

Corporate Center Leveraged Business Units Independent Business Units

JVs & Non-Affliated Basics Performance Market Driven

Service Management

Client Interface and Service Management Business /

Finance Office
• Creates a portfolio of services for Dow businesses and JVs and establishes contracts.
• Manages overall DowAsset
Business business / JV engagement. Consulting &
Project and Business
Process Expertise
• Portfolio
Services management
Center of all services
Operations provided
Support Centeror channeled Services
Servicesthrough Business
Work
Services.
Process
• Manage service lifecycle
• Introduce new services and retire obsolete/low value services
• Improve existing services where they fall short
• Ensure services are capable and competitive
• Measured by service satisfaction, metrics and benchmarks
Business Services Operating Unit Models
• Ensure that services are delivered in alignment with agreements
• Contracts and/or Service Level Agreements (depending on the client)
• Manage “cost-to-serve” of the services
Business Services Organization Model

Corporate Center Leveraged Business Units Independent Business Units

JVs & Non-Affliated Basics Performance Market Driven

Service Management

Business /
Finance
Business /Office

Specializes in mature, well understood work, providing
Finance Office
consistent
work process execution and lower costs to businesses and JVs.
Business Consulting & Business
Process Asset are provided

Services Project and
to businesses, functions,
Expertise and JVsWork
Business Consulting & Services
Business
Business
Services Center Asset
Operations Support
Project Center
and Services
Process Expertise Process
Services Work
Process
Services Center Has
Operations

Support
processes in Center
place to accomplish
Services significant work that requires
Process
Services Center judgment and know-how, is expanding scope beyond the transactional.

Partners with third-party suppliers to provide cost-effective, flexible
resourcing with capabilities required to meet demand, at significant
cost savings to the Company.
Business Services Operating Unit Models
EmploysOperating
Business
Services a global network of strategic locations (Midland and Mumbai)
Unit Models
and satellite locations (Sao Paulo, Shanghai and Terneuzen) to
provide uninterrupted, high-quality service.
Business Services Organization Model

Corporate Center Leveraged Business Units Independent Business Units

JVs & Non-Affliated Basics Performance Market Driven

Service Management

Business /
Supply Chain Finance Office
Operations
TheseEtc –units are
click for full list the operational arms of
Business /
Business
IS Operations theConsulting
functions& Finance Office
Asset Consulting Business
Process Asset
Project and
EH&S
Project and Expertise & Business
Services Work
Services Center Operations Support
Operations
Services
Center require
Expertise
Services a physical
Services link to assets.
Work
Operations Support Center Process
Services include carrier
Project and −Examples
Communication Processlogistics
Business
Asset Services
Support Center Services
management, site security Workand
Operations Lab and Facilities Process
Management emergency response, IT field services,
Emergency and
Security Services
building maintenance and property
management.
Accountable for delivering low cost and
Business Services Operating Unit
Models
high quality service that meets
Operational Level Agreements (OLAs)
Business Services Organization Model

Corporate Center Leveraged Business Units Independent Business Units

JVs & Non-Affliated Basics Performance Market Driven

Service Management

Business /
Finance Office
Business /

Delivers Finance Office
against the prioritized needs
of Dow businesses,
Consulting & JV customers,
Business
Project and
Business
Asset Support
ProjectCenter and the&corporation
Expertise
Consulting ServicesinWork
Business executing
Process Projectand
and Services
Expertise
projects that create orWork
Process
Services improve work
Services Center Operations Support Center
Support Center Services Process
processes – typically with IT
enablement.

Provides cross functional capabilities
at lower than market competitive
pricing.
Business Services Operating Unit Models

Meets variable business demand.
• Centers in Michigan
(Midland/Saginaw/Southfield),
Philadelphia, Shanghai
Business Services Organization Model

Corporate Center Leveraged Business Units Independent Business Units

JVs & Non-Affliated Basics Performance Market Driven

Service Management
Supply Chain Consulting
and Expertise Services
Purchasing Strategic
Sourcing

Advertising
Business /
Finance Office

Functional expertise that the ES&S
Expertise
customer or client will pay for
Business Business Consulting Consulting
Product Stewardship & &
Business
Process Process Asset AssetProject andProject and
Expertise Expertise Services Work

Provides
Services Center knowledge,
Services Operationsexpertise,
Center
Support Center
Operations Support
Project Center
Services Services Process
and
IT Consulting
advanced technology and Support Center Consulting &
Expertise
solutions consultation to Dow’s Safety Expertise Center
Services
corporate center, businesses, Environmental
Technology Center
major integrated manufacturing Health Services and Services for the
sites and JVs. Epidemiology Corporation
Six Sigma Consulting Remediation
Business

Advocates Services
externally forOperating
Business Services Unit Models
sound Operating Unit Models
and Expertise

public policy consistent with Toxicology and Auditing & Compliance

Environmental Research
Dow’s business objectives. and Consulting Sustainability

IT Security
JVs are a fourth business model
we serve from Business
Services
Value Proposition

Deliver services for at least 20-30% lower cost than what a business
unit can achieve by acquiring independent services or executing these
services on its own.

Provides for quicker start up of

new businesses, which:

Mitigates risks (with proven
processes and technologies)

Accelerates operational stability and
ability to sell products

Drives competitive advantage
through value delivery

Accelerates workforce
and world-class operating
performance
Summary

The new DOW requires a customer focused

service model with profitability emphasis

Strong foundation of functional excellence
and cost control

Business Service and its 4 operating units
are providing a market competitive, flexible
model for delivery of services and
capabilities for Dow Businesses and JVs

New DOW businesses and JVs benefit from
proven Business Service capabilities
through quicker start up with lower risk
and cost