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Dow Plans Major Capital Investment to Support Continued Growth in Performance Businesses
Tuesday January 29, 10:00 am ET

Signs Long-Term VCM Agreement with Shintech

MIDLAND, Mich., Jan. 29 /PRNewswire-FirstCall/ -- The Dow Chemical Company announced today that it will break ground this year on a state-of- the-art membrane chlor-alkali production facility in Freeport, Texas. The new, more energy efficient facility is designed to provide a long-term reliable supply of chlorine to derivative products. Startup is planned for 2011.

"Chlorine is a critical feedstock for our performance businesses - enabling future growth in polyurethanes, epoxies, specialty chemicals, specialty plastics, and our agricultural chemicals businesses to name a few," said Andrew N. Liveris, chairman and CEO of The Dow Chemical Company.

Several of Dow's existing chlor-alkali assets in Freeport are nearing the end of their economic life and would require significant investments to continue operation. The Company will begin the process to shutdown those facilities over the next three years. This, combined with the startup of the new facility, will result in a net reduction in Dow's chlor-alkali capacity on the U.S. Gulf Coast.

Dow is also announcing today the renewal of an important long-term commercial arrangement to supply vinyl chloride monomer (VCM) to Shintech, a Dow customer for more than 30 years, in Freeport, Texas. "This supply agreement with Shintech, which will partly fund our new investment, is further evidence of our commitment to our asset-light strategy," Liveris continued. "While we are not forming a joint venture, Shintech remains a strategic partner in our chlor-alkali output in the U.S. Gulf Coast."

"In addition, Dow is pursuing competitive energy alternatives to oil and gas that would further Freeport's energy advantage in North America," Liveris continued.

In 2007, Dow announced plans for future chlor-alkali investments in the Middle East and China. With Saudi Aramco, Dow signed an MOU to develop one of the largest grassroots chemicals production complexes in the world at Ras Tanura in Saudi Arabia, which is expected to include a world-scale chlor- alkali production unit. With the Shenhua Group, Dow signed an MOU to develop a coal-to-chemicals project to be located in the Shaanxi Province, People's Republic of China, which is also expected to include a chlor-alkali and vinyl unit.

Chlorine is a major building block that is essential to society and the world economy. More than 50 percent of commercial chemistry uses chlorine in the process, but it may be absent in the final product. More than 60 percent of the chlorine produced at the Freeport facility will be used to produce performance chemicals, with the balance going to basic chemical production. All chlorine produced at Dow facilities is used in the manufacturing process of other chemicals or products.

About Dow's Chlor-Alkali Business

Dow is the world's largest producer of both chlorine and caustic soda (collectively referred to as chlor-alkali). Chlor-alkali production is a foundation for several of Dow's global businesses. More than one quarter of Dow's products are created with chlorine chemistry.

About Dow

With annual sales of $54 billion and 46,000 employees worldwide, Dow is a diversified chemical company that combines the power of science and technology with the "Human Element" to constantly improve what is essential to human progress. The Company delivers a broad range of products and services to customers in around 160 countries, connecting chemistry and innovation with the principles of sustainability to help provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted.

Source: The Dow Chemical Company

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