Redefine.

Our goal is clear: to redefine what it means to be a world-class chemical company. It is a vision of the future in which Dow creates long-term value for shareholders and has the respect of customers, employees, partners, governments and the public at large; in which our successful reshaping of Dow’s integrated Performance and Basics portfolios has tempered the impact of the traditional chemical industry cycle; and in which our Company outpaces its peers across every metric of financial, social and environmental performance.

It’s an ambitious and exciting picture. And it’s a picture that took shape ever more clearly as we moved through 2006.

During the year, we strengthened our Performance portfolio on several fronts. Following the acquisition of Zhejiang Omex Environmental Engineering in China, we launched Dow’s fourth market-facing business, Dow Water Solutions, offering an array of world-class enabling technologies to the water treatment industry. We moved ahead with various opportunities to expand existing businesses, bringing a number of new production facilities online, breaking ground on others and agreeing to a range of new projects around the world. And at year’s end, we announced an agreement to acquire the specialty cellulosics company, Wolff Walsrode AG, headquartered in Germany, pending regulatory approval.

Our Basics portfolio opened new doors to joint venture opportunities—among them our exclusive negotiations with Saudi Aramco—which will take us to new markets, reduce capital intensity, enhance our technological know-how, lower risk and improve competitiveness.

At the same time, we accelerated our growth in emerging economies, with investments in China, India, the Middle East, Russia and other parts of Eastern Europe. And we advanced our technology and innovation agenda, filling the pipeline with strong, differentiated solutions geared to strengthening our Performance portfolio and enhancing process technologies across the Company.

The year also saw us launch Dow’s pioneering 2015 Sustainability Goals, a set of ambitious but achievable targets that define new benchmarks for local citizenship, product stewardship, innovation and standards of environmental performance.

And we introduced Dow’s The Human Element™ branding campaign, a global effort aimed at redefining the Company’s relationship with the world and showcasing our commitment to improve the quality of life for people across the globe.

Dow Water Solutions
The launch of Dow Water Solutions, our fourth market-facing unit, brings the full power of Dow’s businesses and technologies to customers in the water treatment industry. Driven by our strategy for growth via end-user markets, Dow Water Solutions comprises world-class brands, enabling technologies and industry experts dedicated to advancing the science of desalination, water purification and water recycling. Dow Water Solutions positions our Company as a leader in this sector, furnishing us with the ability to meet growing global demand for water treatment products and reinforcing the commitment of our 2015 Sustainability Goals to help address the issue of clean water access for millions of people around the world.

Focused on Innovation
In 2006, Dow launched a number of new brands and innovative solutions. For example, we introduced INFUSE™ Olefin Block Copolymers, a new family of products that represents a breakthrough in olefin elastomers technology. We launched FORTEFIBER™ soluble dietary fibers, a cellulose-derived product that can help address issues related to blood glucose and cholesterol. In the housing industry, we unveiled SYMMATRIX™ composite decking, manufactured using a blend of wood and polymer and offering many advantages over conventional wood decking materials. And in the automotive sector, we launched IMPAXX™ energy-absorbing foam, which performs better and costs less than traditional materials.

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