Dow Leverages Recently Announced Operating Model To Accelerate Cost Reduction And Efficiency Actions

The Dow Chemical Company (NYSE:DOW) today announced a restructuring program designed to accelerate cost reduction actions and advance the next stage of the Company’s transformation in the midst of persistently slow macroeconomic growth.

These actions will result in a net reduction of approximately 2,400 positions, or five percent of the global workforce. The restructuring also includes the shutdown of approximately 20 manufacturing facilities. Once fully implemented, these actions are expected to result in approximately $500 million of annual operating cost savings by the end of 2014. The Company will take charges totaling approximately $0.50 - $0.60 per share in the fourth quarter of 2012 for asset impairments and write-offs, severance and other costs related to these measures.

In addition, Dow will further reduce capital spending and investments for targeted growth programs that are no longer a priority in this environment. These measures are expected to deliver an additional $500 million cash impact. Taken together with the $1.5 billion of measures Dow has already initiated, this will bring the Company’s stated cumulative intervention goal to $2.5 billion.

“The reality is we are operating in a slow-growth environment in the near-term and, while these actions are difficult, they demonstrate our resolve to tightly manage operations – particularly in Europe – and mitigate the impact of current market dynamics,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “Earlier this year we announced targeted actions – levers we planned to pull to reduce costs and protect our earnings growth path. The interventions we are announcing today represent the next phase in our path to driving efficiency and prioritizing our growth programs. Importantly, we will continue funding projects where differentiation is rewarded even in this environment and where margin expansion opportunities are clear – for example in Dow AgroSciences, Dow Electronic Materials, and our Sadara and U.S. Gulf Coast investments. Taken on the whole, Dow’s strategy remains intact, and our long-term growth fundamentals are strong.”

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