Dow to increase customer focus and reduce costs
Last July, The Dow Chemical Company (Dow) reported 31% tumbled earnings for the second quarter 2012 as the consequence of the global slowdown of the demand and depressed prices on global markets.
Less than two months later Dow is publishing its new global organization to restore earnings and profitability according to expectations.
With $60 billion revenues per year, Dow employs 52,000 people across 36 countries.
Dow owns and operates 197 chemical sites in the world to propose a portfolio of 5,000 different products to thousands of customers spread around 160 countries.
Addressing 90% of the things we use everyday, Dow‘s products and solutions covers all kinds of applications such as clothes and wears, cars, hygiene and medicines, electronics and advanced technologies, agriculture and agrosciences, advanced materials and high performance plastics, coatings and building materials, water treatment and renewable energies.
For years Dow built its market leadership on the power of science and technology to drive innovation in respect with the principles of sustainability.
Anyway and despite the validity of these values, the shrinking demand and the arrival of new comers from Asia and Middle East impacted directly the margins squeezed between aggressive pricing and stable or increasing costs.
With limited perspectives for growth in the key regions of the world, North America, Europe and Asia, on the coming months, Dow decided to adapt its global organization to reduce costs, to be more responsive on capturing opportunities, to turn resources toward the customers and markets.
This new organization Dow will be driven by an Executive Committee with only five members including the CEO.
After the CEO, the four Executive Committee members will lead directly 13 Global Businesses as following:
Feedstocks and Performance Plastics
1) 2) Feedstocks
3) Polyethylene and Packaging
4) Elastomers, Electrical and Telecommunications
For Hydrocarbons and Feedstock, Dow will focus on cost-advantaged regions, while for Packaging, Elastomers, Electrical and Telecommunications Dow will focus on customer through innovation and operational excellence.
Chemicals, Energy and Performance Materials including
5) EO Derivatives, GCO and Plastics Additives
6) Oil, Gas and Mining, Dow Solar, and the Energy business
7) Chemicals and Propylene Oxide (PO)
8) Polyurethanes and Formulated Systems
In bringing together Chemicals, Energy and Performances Materials, Dow expects to diversify the offering to the customers and take market share at low costs to generate profitable and sustainable growth.
Advanced Materials
9) Functional Materials and Dow Water & Process Solutions
10) Dow Coating Materials and Dow Building & Construction
11) Performances Monomers and Epoxy
12) Electronic Materials
Directly connected to the customers new needs, this downstream business is driven by innovation and market demand where Dow expects to develop new value chains with their customer for build their future market leadership.
Dow AgroSciences
13) Dow AgroSciences
Reporting to Dow’s CFO and member of the Executive Committee, Dow AgroSciences is a narrow focused business on the model of new technologies start up companies where new entities and acquisitions must preserve the flexibility to grow fast and to generate new business with high return.
With this new organization, Dow wants to restore its financial performances in reducing costs at all levels in beginning with the top, and to adjust the drivers of its market leadership in concentrating each one of the newly created global businesses on their respective market with more flexibility to improve operational excellence and capture new opportunities for growth.
