Dow’s EVP says chemistry matters more than ever

At a critical time like this, many global chemical companies are setting up business in the Gulf countries to help expand their presence in these emerging economies and impart technical expertise to the regional downstream companies on making commercially viable products that also meet global environmental standards.

A conglomerate that has been in the GCC for more than 40 years and is continuing to expand its presence by investing in key projects is The Dow Chemical Company.

RPME spoke to Howard Ungerleider, executive vice president, Advanced Materials, Dow. He serves on Dow’s five member executive committee with oversight of the Advanced Materials (AM) businesses.

AM is the global specialty chemicals entity within The Dow Chemical Company. It is comprised of several businesses that bring differentiated solutions to customers in key end-markets such as food, pharma, water, electronics, home and personal care, coatings and construction.

“As a specialty materials provider, we power those things that are essential for everyday life and lifestyles,” explains Ungerleider.

The AM portfolio alone has sales in 130 countries, 100 manufacturing locations and 40 technology application centers worldwide. The Middle East is a large and attractive market for this portfolio.

Ungerleider says, Dow is optimistic about the region given that landmark events like World cup 2022 in Qatar and Dubai’s bid for Expo 2020 are driving strategic investments in infrastructure.

“In terms of growth projections, key markets like the UAE, Saudi Arabia and Qatar are a priority for us. We are also exploring unmet needs in places like Iraq and Libya, where we see very attractive opportunities in water treatment and coatings & construction,” he adds.

Dow is also using this portfolio to set the benchmark when it comes to sustainability. The company considers itself lucky to have been working with self-regulating / early-adopter customers for years on technologies like low-VOC coatings or energy-efficient building envelopes.

“Our customers are discerning, and they want a sustainable product without compromising performance. We have also been tapped to share our expertise on new green building legislation in the UAE, and we’re honoured to be able to contribute towards making the country an even greater place to live and work,” he says.

Dow’s largest and most ambitious investment in the region, so far is in Saudi Arabia, for the Sadara project.

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“The Sadara project is progressing well and according to schedule,” confirms Ungerleider.
Once complete, the joint venture will be comprised of 26 manufacturing units and produce more than three million tonnes of performance plastics and specialty chemical products.

The first production units are expected to come on-line in the second half of 2015, with full production starting in mid-2016.

Sadara will employ thousands of Saudis and foreign nationals, and will help diversify the economy by adding value to the Kingdom’s vast petroleum reserves and making chemical products not produced before in the Middle East.

In addition, a value park complex to be built next to Sadara will be key to generating sustainable downstream opportunities for investors and the region. The Sadara joint venture and value park are expected to generate approximately 14,000 new direct and indirect jobs in the Kingdom.

Ungerleider says aside from Sadara, Dow has several new projects in the pipeline for the region such as the Saudi Acrylic Monomer Company (SAMCo), an acrylic monomer joint venture with Tasnee Sahara Olefins Company, a reverse osmosis (RO) facility in Saudi Arabia and the recently-upgraded Jebel Ali coatings facility, which produces advanced and sustainable specialty coatings solutions for both the Saudi and export markets.

The new coatings facility in Dubai will produce advanced and sustainable specialty coatings solutions for both the Saudi and export markets.

“We also continue production of Styrofoam Extruded Polystyrene (XPS) Foam insulation in the region, a world-renowned product that is used in the Middle East and all over the globe to enable more energy-efficient and sustainable structures,” he adds.

But with the execution of these large projects, Dow is focusing on energy efficiency as a priority, explains Ungerleider.

Simple solutions can cause big energy saving, he says. To explain the concept further, Ungerleider takes the example of improving building insulation as one of the clearest and most cost-effective ways to reduce energy consumption and says it can be a powerful tool for savings on energy costs, as well.

Doing business in the Middle East is not only about creating products but also creating employment opportunities.

Between 1970 and 2010, the population of the Arab countries nearly tripled. The region will have 598 million inhabitants by 2050, according to a statistic released by the World Economic Forum.

We understand the need for job creation in the Middle East and are committed to talent development in the region, he adds. For example, in Saudi Arabia, Dow established the Dow Middle East and Africa R&D Center at the King Abdullah University of Science and Technology (KAUST) in Thuwal, as part of a comprehensive R&D collaboration agreement with the University.

Commitments include a research program initially focused on water treatment, coatings, and oil and gas. Dow and KAUST have been partners for nearly four years now.

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Ungerleider believes that the collaboration is a great example of technology localisation, where Dow develops solutions that take into account local conditions, rather than importing solutions from outside.

He further adds that investing in human capital in the region is important to the firm because Dow understands that it will help create the foundation for successful development of petrochemical and downstream industries in the region. In the case of KAUST, Dow has already begun offering education and training opportunities and extended permanent offers of employment to students.

New generations of Saudis are learning technical skills that will enable them to lead locally and compete globally, he says.

Apart from training institutes in operating countries, Dow over the last couple of years has also been seeking an image transformation by associating itself with campaigns relating to nature conservancy and environment. This is not about image, asserts Ungerleider.

“Our collaborations with customers, governments, academia and NGOs is less about image and more about actions that lead to progress on sustainable development,” he stresses.

“Whether it involves the Olympic Movement or the environmental movement, the technology expertise and the passion our people bring to the table is intended to deliver value for society, the planet and our business at the same time,” he notes.

As a global science-based enterprise made up of local businesses, Dow has the means and the responsibility to elevate the quality of life in areas where it operates, says Ungerleider.
“We do that through job creation, philanthropy, and operating responsibly. So, our campaigns are meant to highlight the work we are doing to reduce our own footprint, as well to deliver solutions that help the rest of society do the same,” he asserts.

Ungerleider notes that the innovation engine at Dow is focused on development and commercialisation of carbon mitigation, alternative energy, water purification, crop productivity, building efficiency and many more solutions that improve lives while protecting the planet.

He adds that the chemical company’s commitment to sustainability is integral to its corporate vision, mission, and values, which extends to the Middle East and everywhere the firm operates.

One of the biggest sponsorships seen in corporate history in recent times is Dow’s sponsorship of the Olympic Games. The company struck a $100m 10-year deal with the International Olympic Committee in 2010.

However, Ungerleider says the company has supported the Olympic Games for more than 30 years, even before becoming a Worldwide Partner in July of 2010.

“Our contributions to enable higher-performing and more sustainable Games date back to the 1980 Lake Placid Olympic Winter Games, when Dow made significant donations of Styrofoam Brand Insulation used in ice skating rinks and bobsleigh runs. Over the years, we established a long-standing commitment to the Olympics,” he adds.

In 2010, Dow became a Worldwide Partner and the Official Chemistry Company of the Olympic Movement through 2020. As the Official Chemistry Company of the Olympic Games, Dow provides science-based solutions that improve the Olympic experience for host territories (countries and cities), athletes and fans everywhere.

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The firm also recently announced that it is the Official Carbon Partner of Sochi 2014, which means that it will mitigate the carbon footprint “owned” by the Sochi 2014 Organizing Committee given its responsibility to host and deliver the next Olympic Winter Games.

“Mitigation will happen through the implementation of energy-efficient technologies from Dow, resulting in a net decrease of greenhouse gas (GHG) emissions in the key areas of infrastructure, industry and agriculture throughout the Russian Federation,” he explains.

The Worldwide Olympic Partnership was to allow Dow to showcase its solutions on a global stage. Hundreds of Dow products are necessary for Olympic-related infrastructure and equipment, explains Ungerleider, which in turn will help ensure the success of the games and the growth of the company.

A recent (late-2012) study shows that the Olympic rings remain one of the world’s most widely recognized symbols, resonating with 95% of people.

The power of the Olympic brand and the unique access to business opportunities in emerging geographies – where Dow has 33% of its global revenue (consolidated 2012 numbers) – are evidence of how valuable this partnership is for us, he elaborates.

Dow is also eyeing expanding its product reach through the next three Olympic games, which are all located in emerging economies: Russia (Sochi 2014), Brazil (Rio 2016), and South Korea (PyeongChang 2018) – in addition to Istanbul (Turkey) being one of the three short-listed candidates to host the 2020 Olympic Summer Games (alongside Madrid, in Spain, and Tokyo, in Japan).

Why is the Olympics sponsorship so important to Dow and what can the Middle East learn from it?

“Well, it’s an amazing opportunity to show how our businesses contribute to the products and materials at work to facilitate success at the Olympic Games,” he explains.

“We plan to apply our Olympic experience to the FIFA World Cup 2022 in Qatar, which is targeting to be the first carbon neutral World Cup. We are currently exploring opportunities in infrastructure that will help Qatar meet its goal,” says Ungerleider.

The company is actively trying to promote its green chemistry and involve local communities’ into sustainable living. Ungerleider underscores Dow’s commitment with several youth education and empowerment organisations in the UAE, Kuwait and Egypt.

“We’ve also conducted extensive environmental awareness, recycling and beach clean-up campaigns with schools to protect Kuwait’s marine habitats and wildlife. At Dow, we strongly believe the health of our business is intertwined with the well-being of the communities we operate in and we actively work for the betterment of our communities”, he emphasises.

When asked about the long term vision for a company like Dow, Ungerleider says, it hopes to usher in an era where “chemistry” and “green chemistry” mean the same thing. “With more than 95 per cent of manufactured products enabled by chemistry, world challenges will ultimately be solved by companies, like Dow.

In fact, the percentage of sales from Dow products that are highly advantaged by sustainable chemistry increased from 4.3 per cent in 2010 to 4.8 per cent in 2011. The world needs solutions for big challenges like energy, climate change, water, food, housing, and health. And that’s what we do at Dow. Our $1.7 billion annual R&D investment is aligned to solving these challenges,” he explains.

Finally, he says, growing populations and emerging economies will require additional resources and technologies to secure their safety and well-being. Built on the foundations of green chemistry, Dow’s principles of sustainable chemistry and engineering hopes to deliver new solutions with the needs of society. “One of our 2015 goals is to increase our percentage of sales to 10% for products that are highly advantaged by sustainable chemistry,” he concludes.